Bits Bucket For December 16, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Thank you all so very much for your kind thoughts and good wishes yesterday. Christmas came early for me this year!
*Hugs HBB en masse*
You’re up early. I assume that you’ve been to sleep.
Someday that accursed dog down the canyon will discover that it’s sworn enemy, the night, will disappear of its own accord— his incessant barking at it to do so notwithstanding.
Dogs can drive you crazy sometimes.
One solution = An ultrasonic dog barking deterrent that looks like a birdhouse.
http://www.redferret.net/?p=10826
I don’t know about dogs, but gophers and other animals get immuned to them, according to vector control.
Maybe they go deaf.
Reportably the hundreds of cottentail rabbits that live in the vast expanse of Long Beach airport have gone deaf because of the noise from jet engines.
Tried them, combo, but the radius is way too short for my needs. What I’d really love to come up with is a noise-activated airhorn that blasts a focused ultrasonic pulse at the miserable creatures. Or a loud-speaker system scattered through the pines set to echo down the valley like a voice from on high, “Shut your damned dog up. Shut your damned dog up. Shut…”
Or maybe just a CO2 laser would do the trick.
It’s really not the dogs’ fault.
Sigh.
A story: A neighbor’s dog barked all day while the owner was at work but didn’t bark at all when the owner was at home. Since the owner experienced no problem, as far a he was concerned there was no problem.
So the neighbor made a recording of the dog’s endless barking and endlrssly played it back toward the owners residence over a three-day week-end while the neighbor went off on a trip.
That’s when the problem began to get solved.
combo,
Very most excellent suggestion. I have an ancient ( 1980’s vintage ) TEAC reel-to-reel that can record up to EIGHT hours on a single 10″ reel!
How’s ‘that’ workin’ out for ya’?
Give me an 8 digit grid and my friends the Strykers can put a 40mm round enroute express delivered to the dogs house!
My Son has 3 Strykers in Iraq
My Son has 3 strykers in Iraq
hope this isn’t a double post!
We’ve got annoying dogs here even though they’re a good 300 yards away. I wear earplugs but in the daytime I can hear this one dog, and see him at the back door of the house wagging his tail to be let in, so someone must be inside.
I don’t know why people just turn their dogs out to bark all day, or why the barking doesn’t drive them crazy.
The accursed owners sound like the real problem.
Oh, then play the accursed owners an endless recording of “It’s a small world after all”.
Oh, then play the accursed owners an endless recording of “It’s a small world after all”.
Gah!
Even the mention of that song is NOT FUNNY.
(Now trying to remove said song from cranium.)
Worst ride in the history of Disneyland. Brought back some painful memories of my poor decision to get on that boat…
It’s not just the horrible song, but the clacking jaws.
A friend lived out in the countryside, a very rural setting. A neighbor about five miles away, who couldn’t afford to place power poles from the valley road, would operate a noisy gasoline generator for 4-5 hours nightly — very selfish.
Your friend could hear a gas generator 5 miles away??
The acoustics in the country are extraordinary. I can hear the train coming through from 24 miles up the canyon. With so little ambient noise, and no structures to impede it, sound can carry for literally a hundred miles–as in the jets from China Lake or the Space Shuttle landing at Edwards AFB. I can easily understand how native drums could carry messages across vast distances.
Because of this, using amplified sound as a weapon against rotten dog owners is unwise, as it punishes everyone but the person who obviously doesn’t care about the unwanted noise. I did have some luck against one such person, an animal control officer (!,) by recording the nightly barkfests on digicam then posting them, with extensive commentary, on YouTube and forwarding the links to her superiors, the sheriff, the county resources management agency etc.
“Your friend could hear a gas generator 5 miles away??”
Yeah, I could hear it too. Noise travels easily in the evening’s silence, and my friend lived on one side of a canyon slope. I’d never buy out in the country unless I’d spent time there. I learned something valuable about rural poor folks.
I’m a city limits, single family stick built home, kind of guy. I’m pre-planning how I’d sell when I’m looking to buy real estate.
Your friend could hear a gas generator 5 miles away??
If the evening temps, wind, and ambient noises are in alignment, I can hear the train down valley, as well as airplanes on approach to PSP, as well as the coyotes in nearby golf courses doing the dance of ‘dinners ready’.
Ahansen, do you need any actual assistance after surgery? email- glad to help.Chinle might have mentioned before.
If nuisance barking’s making you crazy, you’re not alone. And, if you think that getting help from the authorities will solve the problem, think again.
I know of one local case where the animal noise complaint system was followed to the letter, yet the barking continued. The good news is that the person who initiated the complaint has formed a statewide advocacy group.
This group is working to change the laws so that those who suffer from the adverse effects of incessant barking won’t have to jump through so many hoops in order to regain the peace and quiet to which they are entitled.
With enough rules and restrictions against nuisance barking, the goverment might be able to “stimulate” all those doggy day care centers that were opened and paid for with HELOC money!
Eddie = barking dog
I started reading that link, why am I not surprised? More window dressing.
Our neighbors where I grew up got a black German Shepherd looking dog. I don’t know what breed it was. It was big, and barked a lot. We were in a duplex, so we couldn’t avoid the beast. He would hang his head over the railing that separated our houses so we all walked the big black barking beast gauntlet every time we left out the back door. We learned to hug the opposite railing. We adapted.
One fine summer day my kitty was in our back yard tending to her babies. Neighbor dog was hanging over the railing, barking, fairly salivating at the sight of those little kittens waiting to be devoured. I think my cat’s patience had finally worn thin. Without warning, a black flash of fur flew up towards Barky, I saw a strike of paws, repeated attacks, and then my kitty (also black) retreated back to her brood.
Now Doggy was no longer barking he was yelping, and blood dripped from his lacerated nose.
Cat: 1
Dog: 0
Yea, kitty!
I dislike cats.
I dislike cats.
lol
“lol”
lol.
Thanks, DD. That is so sweet of you!
My kid is coming up to play nurse for awhile and torment me by trying to make me laff. Child knows the routine….
Well, eeemail me if I can help at all. Love to drive north a tad and bring anything needed, or stories. Can read the hbb to you till you can! ellisdotkarATgmailDOTcom
And I mean it. Anything.
My barking dog story goes like this,
My new neighbor has three, very vocal medium sized dogs and most of the time their yapping was white noise to me. But there was this one day when they just did not stop and after 9 pm I had had enough. And I had a plan.
A week earlier I had purchased a smallish chunk of Limburger cheese for the express purpose of proving to my young son that it’s powerfull odor was one of the few true things in cartoon land. It was so strong that I had to double zip-lock it and throw it in the freezer. Until that day … turned to night with the hound chorus.
I tossed that chunk over the fence naked of all anti-smell plastique and a strange silence fell over the land. I could hear the beasties happily snarfing it up and my imagination was filled with delicious thoughts and images of how happy these hounds would be to see their keeper, how they like to jump up and play kissy face with her, and how touchy she is about smells. Oh, it was the best giggle I had had for a long time.
Cheers
oc-ed
Guess who is Person of the Year?
Great choice and deservedly so. He saved the banking system and turned the economy around quickly. Person of the Decade nominee.
Geez I guess the fact that he completely missed the bubble run-up and the ridiculous risk level undertook by the banking system as a whole that led to the crisis in the first place should be totally ignored? I mean after all he is the Fed chairman for crying out loud.
He is like a fireman who missed the smoke and the flame coming out of the basement until the fire reached the top floors. He then put out the fire after it became hot and obvious, while leaving a pile of crap on the floor for someone else to clean up. Meanwhile clueless folks, while being saved for the time being from the awful fires, is too busy celebrating for the time being while not realizing the mess that was left behind that will take decades that they themselves would have to clean up.
To be very fair, missing a huge bubble run up that leads to an economic collapse is a perfectly valid reason for being chosen Time’s Man of the Year. The collapse was still in full swing as of the start of this year. Now, I kind of doubt that is what the Time write up will emphasize, but it fits within their definition of what Man of the Year recognizes. It is for large impact, not positive impact.
He was appointed in 2007. How is he responsible for missing the bubble that took place 2002-2006?
Bubble Ben has basically denied that there every was a Bubble, so either he’s lying or he missed it. Probably some of both: he’s not to be trusted, and in crazy Fed-land, any and all debt is good, as is inflation.
As usual, I cannot tell whether Eddie is displaying ignorance or deception — the hallmark of an expert propagandist.
I am posting an article written by an author whom Eddie will doubtless label a “socialist” which sheds light on Bernanke’s culpability.
Blame Bernanke
The Fed chairman Ben Bernanke could have acted to burst America’s housing bubble – and yet he did nothing
As the senate debates Federal Reserve chairman Ben Bernanke’s reappointment, it is striking how the media views blaming Bernanke for the Great Recession as being out of bounds. Of course Bernake bears much of the blame for America’s economic collapse.
He was either in, or next to, the driver’s seat for the last seven years. Bernanke was a member of the board of governors of the Federal Reserve since the summer of 2002. He served a six-month stint as head of President Bush’s council of economic advisors beginning in the summer of 2005 and then went back to chair the Fed in February 2006.…
Yes, and all 45 people who still read TIME Magazine will appreciate his award.
“Bubble Ben has basically denied that there every was a Bubble, so either he’s lying or he missed it.”
Actually, he is NOT denying it now! See my new post below for details…
Bear,
Your MO is as follows:
Argument X is made
You post a link to an opinion article that says Argument X is wrong and Y is right.
And therefore since there is an article online that says X is wrong and Y is right, you have proven your point beyond all doubt.
Well OK I’m convinced then. 1 person out of 7 billion believes in Y, therefore Y must be correct.
Thanks for playing.
Why don’t you refute the points made by the article PB linked, that the fact BB was in the economic and financial policy making entities of this country since at least the earlier part of this decade? Thus to say that he isn’t responsible (not in entirety, but part of it) since he only been the Fed Chairman for the last few years is just plain ridiculous.
Cougar — don’t feed trolls with logic. They just ignore it.
cougar91,
Like a lot of people, I’m on the fence about this one? On one hand, we’re perfectly willing to declare that B.O totally ‘inherited’ this mess, but we won’t budge an inch to consider BB was part of those ‘heirs’.
How can you possibly mention BB’s name without dredging up AG’s?
Because I was responding to Eddie’s glorious comment about BB’s pick as Person of the Year. Don’t get me wrong, AG is one of the creators of this mess, no question about it, but we are not talking about AG’s pick as Person of the Year.
Some years from now I believe BB would be talked about in the same vain as AG is now, vs how AG was held up as the “Maestro” when all the non-sense was going on earlier in the decade.
cougar91,
Right, AG was is just a lowly knight in her queen’s service. No, I ‘do’ hear you, it’s just that if you watch BB’s body language from Day 1 it’s as if he -knew- he was being handed a lit stick of dynamite.
I mean when you’re barely appointed and the first phrase you’re associated with is “contained” ( how much can we really blame the guy? )
He’s done an awesome job. Seriously.
“…but we won’t budge an inch to consider BB was part of those ‘heirs’.”
I’ll give you that if you’ll budge an inch yourself to consider BB was one of the ‘architects.’
PB,
Point taken, but any more so than any of the other Fed mbrs. or denizens of the uber-banking complex?
As I’ve said, when no sooner you take office and the first words out of your mouth are “This is contained to Subprime” it’s a pretty disadvantaged starting point.
I think the proof was that in the early hours, and I mean he was immersed in it from inception, was that he seemed so totally caught off guard and ‘in’ over his head.
I’m not sure anyone could remain composed under those circumstances? Can we at least agree that he was able to halt a run on the banks GD 1-style?
“Point taken, but any more so than any of the other Fed mbrs. or denizens of the uber-banking complex?”
No. I disagree with the ‘Blame Bernanke’ writer at The Guardian. But I am sure it helped generate brisk sales of the newspaper to publish that article.
>He’s done an awesome job. Seriously.
Like I said, the country will be dealing with the crap left behind by BB and the Treasury during this “miraculous” rescue of the economy for a decade or two to come.
The final chapter in this saga has hardly been written, not even close.
Suzi Orman stated today to those twits kathylee etc that practice serious frugality because the SWHTF in 2012.
I guess it takes a real genius to fire up that printing press and flood the system w/ easy money.
It does take some reasonable foresight and planning to flood the system in such a way that you have the ability to suck it back out when it becomes necessary down the road. I do give him partial credit for the appearance of having done that. We will see in time whether he succeeded in that vein or not.
One really has to wonder if these people are as stupid as they seem, or are as smart as they are supposed to be?
If the latter, they are definitely crooks, and either way we would all be best off to see the last of them.
History has not dealt kindly with the aftermath of protracted periods of Fed-engineered low risk premiums.
“The whole aim of practical politics is to keep the populace alarmed — and hence clamorous to be led to safety — by menacing it with an endless series of hobgoblins, all of them imaginary.”
— Henry Louis Mencken
I don’t mean to suggest here that Megagank, Inc’s financially-engineered crises are “imaginary,” but rather that financial crises serve to enrich them and also strengthen the Fed’s hold on the reins of power — disaster capitalism at its worst.
See last year’s TARP Bailout: If Congress doesn’t give Paulson a huge pile of money and immunity from the law with regard to his actions, the whole economy was supposedly going to crash.
Congress caved in, the bankers walked with the money, and now here we are a year later with no idea where the money went and lots of “extend and pretend” floating through the wreckage of our economy.
Not to be totally revisionist on everything but candidates McCain and Obama came to the whitehouse and made supportive statemements about TARP. They were both for it.
I kind of threw in the towell at that point. Why fricking bother.
It all meshed with O’savior saying how he didn’t get into this to bail out bankers and two days later gives a 25B handout to Citi.
The battle of man against power is the battle of memory against forgetting.
Statements or not, the problem originate during the Bush administration and it was Bush’s signature on the document, not Obama’s or McCain’s.
To be fair, it was also backed by a 50/50 Congress.
Remind me again, who originated and signed TARP?
Goldman Sachs originated it.
The signature was just a matter of logistics.
Oh this thing is Bush’s “ode to joy” Eco.
Don’t get me started. We might disagree on a lot of stuff but as far as I’m concerned the Republican party died a long time ago. So, I’m out on a fringe with Libertarians.
Course I’m not buying every one of their positions either.
In fact, I don’t think I fit into any neat little mainstream box.
I have been very disapointed in O and the democrats. Plenty of chances to help the little guys. Stop the abusive credit practices, like universal defaults.
Plenty of chances to raise taxes and pay down debts. Plenty of opporitunities to walk away from the madness. But the debt is opporitunity people just keep winning the battle.
“The whole aim of practical politics…”
I am not sure I agree about the ‘whole aim’ part of Mencken’s statement.
Apparently, another aim of practical politics is to execute policies which appear to improve the situation while you are in office at the expense of increasing the amount of S that HTF during your successor’s term.
Indeed, he saved the Bankers and turned the ship into a different iceberg, from Deflation to Runaway Inflation. Or, perhaps Eddie believe recent upticks in “economic indicators” are reflections of actual improvement vs. the end result of trillions in play money chasing yield.
But, whatever - Bubbles Ben Bernanke is certainly Character of the Year!
Pondering,
Funny, but true. And I’m no BB apologist by any means. If you’ll recall though, the sentiment at the time was that AG was bailing out of flaming cockpit just in time to hand over the controls to BB.
We actually felt sorry for the guy. And that happened right here folks!
“upticks” eh? So now you admit there are upticks. Before it was all lies lies and more lies. Soon enough you’ll take the blinders off and see the recession is long gone and we’re in full recovery mode.
I am expecting a rather different outcome, which is that once the illusion in play wears off, you will stop posting here rather than face constant barrages of ridicule.
Of course, history may prove me wrong, as you seem to enjoy abuse.
Ridicule is only effective if the ridiculee is proven wrong. So far I’m batting about .800, so you go ahead and keep on ridiculing while waiting for the end of days if you must.
Oh PS…how’s the Hope N Change going for you these days? Your band of merry kool aid drinkers is getting smaller by the hour. Obbami’s poll numbers for December are the worst for any president since they started tracking the numbers. You going down with the ship on this one, or is there hope you may see the light as well?
Eddie,
Do us all a favor and keep posting though. It’s better than having everyone agree.
“I am expecting a rather different outcome, which is that once the illusion in play wears off, you will stop posting here rather than face constant barrages of ridicule.
Of course, history may prove me wrong, as you seem to enjoy abuse.”
Is there an “ignore” function on this board? If so, I’d like to use it. I’ve reached my limit with this kind of mindset. Very Saul Alinksy in its origin and approach.
Thanks in advance.
Ridicule is only effective if the ridiculee
is provenadmits she was wrong.Nice try, Oly.
I think they choose the person based on their influence, not popularity. In this case they selected the public face of the Government-Fed-Bankster criminal syndicate.
Well now we KNOW you’re a troll, or a fool.
Barry?
Ooops, It was the exalted Ben Bubbles Bernanke. Perhaps the Queen will knight him also.
Maybe he will get a nobel peace prize…
Time magazine named Adolf Hitler as 1938’s Person of the Year, so I’d say the title is a bit tarnished.
you’re kidding right?
It’s true. Speculation is that it was an attempt to appease the man (monster) and avoid war.
The award has to do with the person who has had the most impact on events that year.
Don’t know who they were originally, but with 20-20 hindsight, a few examples of who they should have been:
(Your list may vary)
1941- Isoruku Yammamoto
1957- Sergei Korolyov
1963- Lee Harvey Oswald
Exactly. It’s not about an award, but impact.
Hey, that’s two Fed chairmen in a row to attain cult status. Gee, I wish we could go back to those days when hardly anyone knew their names!
They should revoke the first guy.
It only shows how much the MSM is in the pocket of the banker machine..
It’s not necessarily an honor. He now joins Hitler, The Ayatollah Khomeini, and Joseph Stalin on the list of Time’s “man of the year.”
Pol Pot and Charles Manson were runners-up, I’m guessing.
Actually,
Time’s man of the year isnt always for accolades. It’s for the person who had the most impact in the U.S. or world history. It’s not always a good thing..
PacMac. But maybe he deserved the honor.
+1 Stepn.
Maybe it’s that “liberal” media.
dam dem dar gunn grabin gay librulls.
dam dem dar gunn grabin gay librulls.
Tee Hee….
I have a few true liberal friends. I love debating them. I usually dont have a problem with really left leaning liberals per se, it’s just those hate america types that I cant talk to about politics.
I sometimes have to remind myself that those like Pelosi and Barney are true americans, and probably dont want to see the country fall just like me. It’s just our world views are so different it makes that difficult. I am actually pro abortion up until about 5 months of life. I feel it is a woman’s right until that point. When you can feel the baby kicking is where I do the cut off. If it can survive outside the womb, you need to have it, IMO. But then again, I watched my wife have two tax deductions for us, and it didnt look fun…
Expressing an opinion on emptied skulled non-issues like what a woman does with her internal plumbing isn’t debating.
Try *discussing* public policy issues. And it might put some distance between you and the mindless dem dar dam librull idiocy.
There’s a major downside to all encompassing terms such as “liberal” and “conservative”; these terms tend to lock a person into a stance where he doesn’t necessairly belong. You comment on abortion is an example; to some folks you must be a liberal if you are for abortion.
I knew a guy who loved coffee but gave it up because he became a Mormon. To him being a Mormon was an all-or-nothing proposition. Mormons didn’t drink coffee and he was now a Mormon therefore he didn’t drink coffee.
Different strokes and all that.
Thanks Excreter for defining what is and isn’t debatable. Your years in the union have taught you well I see.
There’s a major downside to all encompassing terms such as “liberal” and “conservative”; these terms tend to lock a person into a stance where he doesn’t necessairly belong.
Only if that person allows themselves to be locked into that stance.
Or locked into that label.
To me, the assumption that your stance on choice is indicative of your other beliefs is proof that the strategy to use “hot button” issues to manipulate the masses.
Easier to ignore / be blinded to the erosion of your economic situation and political freedoms if you’re on the “right” side of those issues…
Take marriage for example… I’ve never understood why the government sanctions marriages at all - arguments about the nature of marriage are based on religious / spiritual criteria and because of our separation of church and state the governments involvement seems clearly unconstitutional.
The government’s only role should be assuring there are legally enforcible domestic contracts and protecting the involved parties (spouses and children) from abuse.
To me this is a truly conservative “get the government out of my life” issue.
I am actually pro abortion
as you sew, so will you reap
don’t ask me how I know
Good Morning Step:
Actually that is a reasonable and fair position to take on this issue.
But the issue for the next 4 months “Late term” is when the process goes horribly wrong then what? Do we force the parents to have the “baby” or do we acknowledge the fact these parents are faced with the most horrendous of choices of their lives and should leave the guvment and religious nuts out of it? It’s very rare anyway but it could mean millions of dollars of taxpayer money to care for a “baby” that will never be productive.
——————————————
I am actually pro abortion up until about 5 months of life. I feel it is a woman’s right until that point. When you can feel the baby kicking is where I do the cut off.
OMG, I could never be a Mormon.
“OMG, I could never be a Mormon.”
Oh sure you could, you just have to drink your coffee in the dark and then ask for forgiveness if they catch you.
I had a mormon neighbor who would sneek into the TV room late at night to watch soft porn. I loved to barge into the room just to watch him scramble for the TV remote and then fumble for an excuse.
Speaking of empty skulls….. Eddietard?
@WHYoung
I think government is involved in marriage because it is a contract and nothing more. So, there are a lot of contract laws associated with marriage.
Also, when you get involved in issues like paternity and child support… well… you open lots of ugly cans of worms. Again we are being forced to subsidize other peoples poor choices in mating and child bearing habits.
You pass any kinds of laws on that stuff and you get involved in enforcing the contracts.
That’s why I think people should actually be required to sign a contract, that is a clear informed consent and acknowledges the “business” side obligations and responsibilities, including possible future contingencies for responsibility to children, etc.
Leave the blessing part of it to the clergy.
“I knew a guy who loved coffee but gave it up because he became a Mormon. To him being a Mormon was an all-or-nothing proposition. Mormons didn’t drink coffee and he was now a Mormon therefore he didn’t drink coffee.”
A coffee drinking habit is a useful signaling device to your Mormon friends and relatives that you are not a good prospect for joining their church. Keeping a few bottles of table wine handy is also useful…
C’mon PB…. don’t you want to become a moron? Remember “proud duck” here on the HBB? He was a real live example of one.
Looks like I am a good candidate.
Nah, the underwear thing is still……..
That’s why I think people should actually be required to sign a contract, that is a clear informed consent and acknowledges the “business” side obligations and responsibilities, including possible future contingencies for responsibility to children, etc.
Leave the blessing part of it to the clergy.
————–
Completely agree. If it were me, I’d take the word ‘marriage’ out of the govt’s hands, and in it’s place put ‘contractual unions’, which get the rights and responsibilities granted today as we do for marriage, but can be for any 2 parties that wish to enter into it, be they gay, related (aged parent/caretaker type relationship), or whatever.
it’s just those hate america types that I cant talk to about politics.
I sometimes have to remind myself that those like Pelosi and Barney are true americans, and probably dont want to see the country fall just like me.
stpn, you need to remind yourself often that just because you and the ‘other guy’ don’t agree, doesn’t mean they ‘hate America’ and do want what is best for us all. True. Black and white isn’t.
And Eddie, stop with the attacks. And change your name to Ed or Edward for seriousness sake.
as you rip, so shall you sew
Well,sloth, I will. Got really tired of hearing all the hate on unions, the HBB folks, PB etc. Spending less time here due to HBB newbies and the hate.
And missing the levity and joy that Oly balanced out, and Ate going to get healthy- miss you 8 already, and Ahansen getting fixed so will be away. Seems the balance is evident as a balloon leaking helium and all is left is a squeaky voice and one flacid piece of plastic.
There has to be balance. Sometimes the balance is sorely lacking and the attacks are hard to take with all that surrounds us outside of here on a daily basis.
DD-I was joking around with 45North’s post way above, but as usual I was too lazy to make that clear. If I even could.
I miss Oly, too. And I miss ate’s commentary already, and he’s still lurking out there! It can get to be a Rush-ian roulette circle jerk around here at times. Keep levity alive! (Play of the waves never stopped the tide.)
Gad, sloth. In context, that was gruesome, but quite funny.
“And Eddie, stop with the attacks. And change your name to Ed or Edward for seriousness sake.”
How would we remember his resemblance to The Beave’s rascally friend if he dignified himself by removing the ‘die’ ending from his name?
The MSM are the propaganda arm of the corporate cartels and financial oligarchs who own them. They also serve as the globalists’ border collies to herd the sheeple in the desired direction (where they can be fleeced most thoroughly).
It doesn’t help that BOTH political parties are wholly owned subsidiaries of Wall Street.
Spot on.
precisely
exactly
And how much the Person of the Year is in the pocket of the banker machine…
history will not be as kind.
Yes, the meter hasn’t stopped running on this event, not by a longshot.
Who knows — history may even connect the dots between what the MSM publishes and where the money to fund their operation originates.
Why wait for history? We’ve already connected those dots.
I guess I should have said “wait for history to discover the dots we’ve already connected.”
Dec. 15, 2009, 12:33 p.m. EST
Foreigners buy $43.4 billion in U.S. assets in October
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Overseas investors bought a net $43.4 billion in long-term U.S. securities in October, down from $55.7 billion in the prior month, the Treasury Department said Tuesday.
Net purchases by private foreign investors were $28.8 billion, down from September. Foreign official institutions, including central banks, bought $14.6 billion — the biggest monthly increase in at least four months.
The Treasury International Capital report, or TIC, report is tracked closely in currency markets as an indication of foreign investors’ interest in buying U.S. assets, which require buying dollars.
Its importance is limited since the data are two months old, but it still tends to broadly track whether the dollar rises or falls. In October, the dollar index (DXY 76.68, -0.28, -0.36%) , which measures the greenback against a basket of currencies, lost 0.5%.
During October, investors became skittish about the potential strength of the U.S. economy’s recovery, but those forces have largely reversed in the interim, said Brian Bethune, IHS Global Insight’s chief U.S. financial economist.
The dollar index dropped 1.9% in November, but it has recovered of late, having added 2.9% already this month. Read Currencies column about the dollar.
“We would expect to see a significant rebound in capital inflows to the U.S. in the November and December time frame,” Bethune wrote in a report.
…
Didn’t Time run a cover with a man hugging his house at the very peak of the housing bubble? In Bernanke we trust?
BWAAAAHAAAHAA!!!!
mrktMaven,
Excellent point. “Why we’re Ga-Ga over Real Estate” I believe was the tagline? Not sure of the exact issue but I’ll always attribute that more to Greenspan’s tenure than Ben’s.
Time also picked us as man/woman of the year. The front cover had a mirror like cover on it.
You weren’t included.
Well yes I was. I saw my glorious self.
Time just named Bernanke “Man of the Year 2009″.
This, from the magazine that named Adolf Hitler “Man of the Year 1938″.
I feel like I am taking crazy pills.
.
Time Magazine makes some great choices for “Man of the Year”
This one is one of my favorites:
http://tinyurl.com/4vchy
Eddie just can’t be for real. It is his mission to start $hit.
I’m actually wondering if he is my cousin’s ex-husband. Eddie was an impossibly annoying runt of a man who just couldn’t shut his mouth. She got so tired of him she gave him everything just to allow her to get away. It was the best decision of her life, as it improved remarkably in a matter of hours after the divorce.
Yep, he’s a troll.
I would have sworn he’s Cramer. He’s got that same ignorant arrogance.
Has Oly posted since Eddie showed up? Maybe this is her latest form of entertainment.
Now that would be schweet if “Eddie” turned out to be “Oly” in disguise.
Or was Oly always Eddie in disguise?
Maybe Oly was Eddie in disguise?
“…It is his mission to start $hit.”
eddie is a Haskell, all of us here on the HBB have known x1 or x2 from the school playground, many moons ago…
Definition of a “Haskel” :
“He was known for his neat grooming — hiding his shallow and sneaky character. Typically, Eddie would greet his friends’ parents with overdone, good manners and often a compliment such as, “That’s a lovely dress you’re wearing, Mrs. Cleaver.” However, when no parents were around, Eddie was always up to no good — either conniving with his friends, or picking on Wally’s younger brother Beaver. Eddie’s two-faced style was also typified by his efforts to curry favor by trying to talk to adults at the level he thought they would respect, such as referring to their children as Theodore (Beaver’s much-disliked given name) and Wallace, even though the parents called them Beaver and Wally.”
“A weaselly wise guy, Eddie could be relied upon to connive and instigate schemes with his friends — schemes for which they would be in the position of blame, if (and usually when) caught.”
Dude, I disagree with your paranoid delusions of PTBs, OTPs and PPTs and I like poking holes in your ridiculous arguments.
Like for example, Ben Bernanke is a great choice for Man of the Year. You of course think it’s an awful selection since your 0.015% checking account is suffering from his actions. I told you to buy stocks didn’t I? It’s not his or my fault that you refuse to see reality and live in a world of never ending doom, gloom and misery.
You didn’t “tell” Hwy anything. He made a nice profit on Ford stock way before your trolling @ss ever showed up here. My advice is to shut your pie hole once in a while, and learn a little from the intelligent people here, as opposed to consistently making yourself look the fool. And, talk about paranoid….
A nice profit on Ford. Good for him. Then why is he so upset with Bernanke? That profit would have never happened without his actions. Sheesh, can’t ever please you people.
I have a great idea. Ben should have another HBB convention and make sure to invite Eddie. I will hold his arms while anyone who wants to can pummel his gut with punches. It should be great fun!
Frankly, I’m embarrassed by many regular posters here on this board. Rather than stoop to personal attacks against Eddie, I’d prefer to read well-reasoned responses to his posts which, for the most part, don’t make individual attacks to others here.
Eddie’s posts can pluck a topic much like taking the devil’s advocate position and increase the value of perspective on a topic.
If everyone here simply blew smoke up each others a** there would be no valuable discourse or learning from dissenting opinion.
As far as Eddie being Oly - that’s a laugher! It’s common knowledge that Oly will only be found with a shovel in ATE-UP’s backyard!
Cmon… EddieTard is a keyboard cowboy. He’d never show and I’ll wager on it.
‘don’t make individual attacks to others here’
This is because I don’t let them through.
‘taking the devil’s advocate position’
I was listening to a web page for crank callers the other day. The obvious goal is to keep the caller on the line, answering pointless responses for as long as possible.
‘If everyone here simply blew smoke up each others a** there would be no valuable discourse or learning from dissenting opinion.’
As the moderator, I don’t think there is any lack of disagreement on this blog. For example, I imagine you guys will fight about which coffee is better. As for learning, that’s up to you. But we’ve always had a saying; don’t feed the trolls.
Can we burn him at the stake? (kidding!)
Hey, when I see’s a ‘Haskell’ I say: “Hey, Haskell come over here and stick your slick tongue on this here pole.. I’ll give ya $2.00!…
Haskell, being “wise” says: “Hwy, you’re trying to trick me…I want $4.00!”
Hwy, says O.K., Haskell, no fooling you, you’re so wise, I’ll see your $4.00 and raise you another $2.00 if you can stick both of your hands deep in your pockets an say: “I was once a Haskell, but now I’m a “Cravenmore”
Haskell responds: “Is that in cash Hwy, or do you need to access your Amex Zync card?”
Hwy: “Cash Haskell, hey, how long you been a “Cravenmore”?”
“I have a great idea. Ben should have another HBB convention and make sure to invite Eddie. I will hold his arms while anyone who wants to can pummel his gut with punches. It should be great fun!”
Uhhhh, no.
There were some very heated discussions in Vegas and some very strong personalities disagreeing with each other. And since this is America and we still allow people to disagree without coming to blows it only added to the fun and made it more interesting. If Eddie wants to show up at an HBB gathering I would hope he would be given the same respect and safety that any other member would be granted. If I am there I guarantee that alternative voices will always have a right to be heard as long as they were respectful in return.
So Eddie disagrees with us. It was boring with no trolls and while I believe his optimism will be proven wrong I still want to hear another viewpoint to keep my own world from being too narrowly focused. And there’s always the chance he will be proven right and us wrong. We think we know what’s going to happen, but no one knows for certain.
And lately, although I am pretty bad at keeping track of this stuff, it seems like Eddie has done far less of the personal attacks whereas others seem to be doing more of them including the incessant name calling which is getting beyond tiresome. Granted, Ben may be blocking some personal attacks and Eddie recently went back to “you people” as if we all think exactly alike
but still, like Watching the Carnage I’m more embarrassed by some of the regulars acting like bullying school children than anything Eddie says.
Lighten up folks and let’s try to use a different opinion as a learning opportunity and a chance to engage in proper, intelligent debate.
Whatever. The guy’s a tool.
IIRC pb was told his figures were not only wrong but so was he, rather than come up with something provable. And telling ‘us’ ‘we’ were wrong to wait to buy etc. and ‘we’ were wrong to not be making some hay in this mkt. Heck ‘we’ have Ben for that! And some of ‘us’ are actually making inroads in that direction but it isn’t real estate which still seems so lopsided unless you have some serious capital in Cash handy.
“I’d prefer to read well-reasoned responses to his posts which, for the most part, don’t make individual attacks to others here.”
Don’t. Feed. Trolls.
“…You didn’t “tell” Hwy anything. He made a nice profit on Ford stock way before your trolling @ss ever showed up here.”
Tankxs Griz!
Just think what my “profit” of 30,000 “coconuts” would have been at ($9.03)? ;-(
Hey, all I said was FORD can’t die @ $1.53…truly, I was a “TrueBeliever™
But let’s be clear… Once a “Haskell always a Haskell” is something I recognize only when “he” speaketh… did eddie say something?
Eddie=Oly. Just playin’ the part for laffs. Quite well, I might add….
To Congress: Your Loan Has Been Called.
Karl Denninger ~ Market Ticker ~ Dec 16, 2009
Leaders are considering a hike of roughly $300 billion to the nation’s $12.1 trillion deficit, though the final figure has not been nailed down, congressional aides said on condition of anonymity.
Democratic leaders had previously hoped to raise the limit by at least $1.8 trillion, enough to take care of the government’s debt needs through the November 2010 congressional elections.
What was your first hint the former $1.8 trillion increase attempt was a bad idea? Perhaps this?
http://www.321gold.com/editorials/denninger/denninger121609.html
So what is the answer? I guarantee if the govt stopped spending right now we would freeze hard and the unemployment rate would double or triple and all that goes along with that.
The problem is VERY simple. We are a consumer / work ethic driven economy, and we are not needed to make the things we consume, since these are more “efficiently” produced overseas.
Check Mate!
Foreclosure buyer demand dips as supply mounts.
NEW YORK (Reuters) - U.S. home buyers are less willing to buy foreclosed properties than they were six months ago, citing risks like hidden costs, but demand could grow because of the government’s expanded tax credit, a survey showed on Tuesday.
Housing Market
A continued drop in demand for the glut of foreclosed properties would add a fresh layer of pain to a housing market just emerging from a three-year nosedive.
The percentage of Americans at least somewhat likely to consider buying a foreclosed home fell to 43 percent in November, sharply below May’s 55 percent, according to a survey by Harris Interactive.
The survey was conducted November 5-9 on behalf of Trulia.com, a real estate search engine, and RealtyTrac, which tracks foreclosures.
Buyer expectations are becoming more realistic, Trulia Chief Executive Pete Flint said on a conference call.
Next year “government interventions will start to disappear, shadow inventory will hit the market and mortgage rates will start to rise” to around 6 percent from under 5 percent, he said. “We’re in a false state of stability.”
Shadow inventory includes houses that banks now hold but have yet to put up for sale.
“government interventions will start to disappear…. Really? What are the odds of that happening? I think a more honest statement would be that government intrventions are SCHEDULED to start disappearing.
Don’t be so sure, Jim. The conservative democrats in will be getting nervous about election time by next spring. I wouldn’t count on them to jump in on another extension. Now, there may be enough republicans who are so indebted to the real estate industry that the votes can be put together, but it is not a done deal. Maybe if there is a huge fall off in house sales from March through to just before the program ends, but that isn’t likely unless interest rates are already going way up.
They let cash for clunkers end. This one might end too.
Well, I think they’ll be more circumspect about bailing out bankers, but I don’t think that benefits aimed at “Main Street,” will be scalled back much.
I hope they reinstate it next year. Our 1994 Volvo broke down a year before C4C and we bought a new car with no benefit. Now our second car is getting close to its last legs and we’re planning on hanging on until the next program.
I have a ‘95 Volvo w/300,000. What was your ending mileage, and what did you replace it with? What was your decision matrix?
95 toy wgn 180,000. Volvos R 4 ever.Good for you!
add a fresh layer of pain
For a second, I read that as “add a fresh layer of paint.” I wonder if foreclosure demand is dropping because 1) those houses are now six months older and falling apart 2) the word is getting around that foreclosures need a lot of work.
I heard that foreclosures need at least $15-20K of rehab, and those are the ones that are habitable. I can’t imagine what it’s like to fix up the ones where the toilets are full of concrete and the copper piping has been looted.
I think part of it is people going around and looking at the forclosed places and giving up hope. Person in my office and her husband were very into looking at forclosures. They went to dozens. Ended up buying an older, recently renovated town house much further away from work. And they were talking to all their friends and neighbors about what they saw in the forclosures. Disasters - all of them. $15K to $20K wouldn’t have begun to remediate what she was describing, including many, many modifications into illegal boarding houses.
“remediate”
( Yep, she’s an attorney! )
http://www.msnbc.msn.com/id/22557579/
I was just curious to get feedback from our Baltimore posters as to how it’s possible that what’s become of the city is somehow Wells Fargo’s fault? Allegations of “reverse redlining” abound!
I’m sure once the court decides in the city’s favor all will be right again in MD!
The good foreclosures have sold. The remaining foreclosures are one of two categories.
1. Uninhabitable
2. Brand new houses in subdivisions with 3 finished homes, 7 semi finished homes and 12 empty lots. Which makes the neighborhood unihabitable unless you like living next to soon to be squatter villages.
Doesn’t matter how cheap they are, nobody in their right mind will want anything to do with these homes.
Well I think that Eddis has a point here. The good foreclosures can sell quickly if priced right, but the bad ones will continue to sit for a good long while. I suspect that many of those people who bought houses and rehabbed them got stuck upside down when the bubble popped and no longer have the wherewithall to buy again. So there’s a much smaller market for “fix-er-uppers” than there is normally.
You should see things out here in California. Forclosures all over the dang place in all types of neighboorhoods.
Prices seem random. Some come in low and sell quickly. Others are languishing on the MLS for nearly a year.
Even more are in limbo with the stickers on the house, no occupants and no public listing.
My colleague and her husband have been looking for months and months. If there were good ones to find that ever got outside the realtor community and their favored insiders, they would have seen at least one. She said that there were none that were livable. Not a single one.
So come on Eddie, put a bullish spin on this. How is this the bottom?
Jim A,
Good points as well. Personally, for all my bottom feeding fantasies ( I never pictured I’d have to buy a foreclosure foreclosure… )
I mean like the ones we had back in the day? Leaky roof and all. I was thinking more like exchanging dirty glances as they roll out the drive as you roll in?
Like George Carlin used to say: Getting other people’s cr@p out of the way so you can move your ’stuff’ in! Mold? Work? Forget it.
“The remaining foreclosures are one of two categories.”
3. Incipient.
Groups are buying #2 with an eye toward finishing and dumping the new homes (perhaps 20% below today’s comps to take into consideration the risk associated with an incomplete subdivision), and essentially keeping the rest of the project on hold for the next 3-5 years.
These investors’ basis is a small fraction of the hard costs that went into the lots (20-35% of just the cost of the steel, concrete, pipes, etc.). This attributes a negative value to land. In places like CA, where it is difficult to get new land approved for development, the bet is that when it makes sense to develop again, they should be able to sell this land for at least the improvement cost (3-5x what they paid).
Those homes in category #2 will trade (and are trading), but not to the individual buyers/investors.
So, #1 (dumpy homes) will languish or fall in price until someone can make a buck by fixing up the dumpy homes (either as an investment, or sweat equity for an owner). Either the price needs to fall more, or the value of fixed up homes needs to rise. I think it will be a combination of both.
The real trick to picking a foreclosure is finding an ugly one. I’ve been stripping more wallpaper from ours.
Of course, the real benefit to this house is the sizable backyard (for California— I understand there are places where a quarter-acre is small!) That backyard was almost completely masked by overgrowth and a tree that is more or less growing sideways. We’ve taken out quite a bit of that tree and even so, it’s still large and obnoxious. At least there won’t be any need to call in the professionals for the trunk, since it’s only a few feet off the ground.
Whay kind of tree is it? You might want to save it. It takes one afternoon to cut down something that takes fifty years to regrow. Think long and hard before you cut it. Consult an arborist or a landscape architect. I think a sideways growing tree would be a cool focal point of a backyard. I bet the birds love it. Put a tree fort in it, and a hammock.
I had friends who cut a large tree out of their backyard to ‘open it up’ and ended up regretting the open, sun-parched backyard that resulted. Mature trees should be treasured, even more so if they’re funky or weird.
For a development it costs around $20-30k +/- gas, sewer, electric meter + $50 per ft, taxes just to the slab. In CA.
In CA, existing home if you added more than 400sq ‘ you paid huge amt for state schools tax, but if you added 399′ = nada.
I saw the same thing, polly, when I was remodeling houses. The DIY disasters were mind boggling. Along with the shear neglect. Of course, that’s how we got the deals.
I used to say that I spent more time unfking things than upgrading.
I used to say that I spent more time unfking things than upgrading.
funny but not.
…the word is getting around that foreclosures need a lot of work.
My former landlady bought a foreclosed property back in 1998. Property had two houses on it, and, boy, did they need work.
Took her the better part of a decade to get them back up to snuff. Even though LL was quite handy, she had to fork over quite a bit of money for building materials.
So we’re all in agreement then…this supposed massive “shadow inventory” is not inventory at all. It’s unsellable junk. Even though foreclosures and non-foreclosures are both the same product (houses), It’s almost a separate market given the vast difference in quality of the product.
Look at it this way. You want to buy a car. There are 3 solid used cars for sale at $15K. There are also 5 junkers cars for sale at $500. Except they need a new engine, new transmission, new tires, new brakes, new shocks. The total cost to buy all that is $13K and 100 ours of your time. You could buy the junker and fix it up, but you don’t have the time or the know how or the patience involved to save $2000. So you buy one of the $15K cars.
Now suppose that 5 turns into 25 and the price is now $250 per junker. The price of the other 3 cars won’t be affected at all. Just because there are more junkers at a lower price, you’re no more inclined to go through the hassle to save an extra $250 over the original $2000. Same thing with an increase in foreclosures that are uninhabitable.
Which is why the bottom is here to answer pressboadbox’s question.
“So we’re all in agreement then…”
On what? On the fact that you don’t know how to read?
“The remaining foreclosures are one of two categories.”
3. Incipient.
The forclosures in relatively close in DC suburbs are not unsellable. They are just too expensive given what has to be done to them. When they get cheaper, someone willl buy them. The issue will be further complicated by needing more cash to buy a place that is filled with illegal modifications and therefore not yet possible to occupy legally. That is where the folks who have cash (King Combo), will be able to get good deals. I think it will take the towns forcing something on the bank/bondholder owners, but that is for this area. Oh, and if some of the rooms were used as meth labs, they might actually be teardowns, but even just the lot has value if you are in functioning neighborhood in Silver Spring, Maryland. It is the prices. They are too high.
Cardboard boxes in empty subdivisions that are a 45 minute drive from anything resembling a good job may have different outcomes - even if they weren’t turned into boarding houses/meth labs.
“…but demand could grow because of the government’s expanded tax credit, a survey showed on Tuesday.”
MSM commentators keep whistling past the graveyard on the expanded tax credit’s future impact, but I am skeptical (as usual!). They never seem to reflect on the possibility that the credit’s amphetamine-like effect on first time buyers this past year might have already burned the chair legs out from under home purchase demand for the near-term (say 1-2 year) future.
I know I mentioned this before, but I’ve been replacing the windows here at the Arizona Slim Ranch. Was speaking with a sales rep from the window company a few weeks ago, and he was of the mind that the energy efficiency tax credits are a good thing because they’ll get people spending money again.
Didn’t take too much reading between the lines to figure out that, even with those credits in place now, people aren’t spending the way they used to. Methinks that a good chunk of this window company’s business went poof when the housing bubble did.
I had 4 windows replaced and enlarged on my house. The energy efficient guys all wanted around $3600 for the job.
Instead i went with a bid for $1900 for 4 home depot specials and if I want, I could take those out and have Home Depot replace them with the energy efficient ones for around $1700 - which totals up to the same price.
Of course, the ones I got keep the cold and heat out just fine, since most windows made today are double paine low-e glass, and most are argon gas filled.
I think the next step is extending the credit to specuvestors.
Yes, it is.
The end goal is to get the Bubble back to full force, where everyone is flipping houses like mad, fraud is rampant, and bankers are richer than rich.
The end result will be gradual economic collapse in some form (probably dollar crash) and a lower standard of living for all the workers, especially those who did NOT play the fraud game.
In/Pondering,
Thanks guys. Any good sailor knows, when you’re taking on water, the first thing you need to do is plug the leaks.
Allowing the reic’sters that created this to go back and exploit it a ’second’ time is just beyond my comprehension. How did we let this happen?
It will take a long time for the capital to flow freely, even to reasonable borrowers. I wouldn’t be worried about a credit-driven residential real estate bubble anytime soon.
Homebuyer Tax-Credit Extension Fails as Catalyst: Chart of Day
By David Wilson
Dec. 16 (Bloomberg) — President Barack Obama’s extension last month of a tax credit for first-time homebuyers failed to stir optimism among homebuilders or stock investors about the industry’s prospects.
As the CHART OF THE DAY shows, the National Association of Home Builders/Wells Fargo Housing Market Index and a Standard & Poor’s index of homebuilding shares dropped after Obama signed the legislation on Nov. 6. The chart tracks these indicators since 2000.
Homebuyers received another five months, until April 30, to take advantage of the government’s $8,000 credit. They also became eligible for an additional $6,500 credit if they owned their previous residence for at least five years.
“The extension has not materially helped traffic or sales despite the program’s expansion,” Carl Reichardt, a Wells Fargo analyst, wrote yesterday in a report.
…
That is wrong. The $8000 is for “first time” and the $6500 is for everyone else. The $8000 and the $6500 don’t ever get added together on one transaction.
“amphetamine-like effect”
Mmmm, pretty accurate actually. Right, as long as we can keep stealing buyers from the -future- we should be just fine? LOL.
I don’t know about everywhere else, but here in DC /NoVA a high percentage of Foreclosure are full of Black Mold
The stupid Bankster/ Realtors had the electricity off during the summer & the sump pumps didn’t work when it rained heavy
The combo of flooded basements & high humidity (as the AC was off as well) makes for mold grown’ heaven
Yeah - people are lined up to buy those houses -
NOT!
Link?
Shelby:
The NEW stimulus package:
FREE houses on Craigslist…take whatever you want….its free scavenge loot steal… we will “employ” all those outta work construction workers security guards to supervise and then bulldoze 1 million homes…
people will have JOBS….and solve the foreclosure problem.
They are doing similar measures around here, but in relation to winter. The homes are marked “Winterized” and the toilets/sinks/tubs are taped off to prevent someone from tuning them on during viewing. From what I can gather they turn the power off, or reduce the heat to 50 degrees, and pour antifreeze down the drains so the P traps don’t freeze/crack after shutting off the H2o line to the home and attempting to drain the lines/tank. We just had a week of 6-10 degree temps. There are going to be big issues come spring in some of these homes.
This will drive a spike through the heart of the millions waiting for the ‘miracle’ rebound of the housing market. Not to mention the continued price devaluation. A 620 score is still low, however the 20% is going to be tough for many perspective buyers. Going back to the way things should be done will be a surprise to many. I can already hear the cry… It’s not fair!
Home buyers need good credit score even with 20% down payment.
~USA TODAY
Five years ago, if your application for a mortgage included a 20% down payment, your bank would have approved your loan by sundown and sponsored a parade in your honor.
But in this new era of tight credit, having a big down payment no longer guarantees you’ll qualify for a mortgage. Starting this week, mortgage finance giant Fannie Mae will require borrowers with a 20% down payment to have a credit score of at least 620. Previously, the cutoff was 580.
Fannie Mae buys loans, providing an important source of financing for lenders. For that reason, its guidelines are considered the gold standard for mortgage loans. Most banks are expected to adopt the new standards, if they haven’t already.
“Credit scores have never mattered quite as much as they do now,” says Bob Walters, chief economist for Quicken Loans.
In addition, Fannie Mae won’t approve loans for borrowers with a 20% down payment if more than 45% of their gross monthly income goes toward debt. Fannie Mae didn’t disclose the previous debt limit, but it was higher than 45%, says Fannie Mae spokesman Brian Faith.
You are correct, WMBZ,
BUT,
You know someone will start whining that this isnt fair to poor folks and you are discriminating on blacks, asians, illegal immigrants, green people, the trees, vegans and OH MY GOD, what about the children???????
This liberal, socialist govt will try to keep this bubble inflated at all costs. I wonder if Fannie can be bullied by the Messiah…
This government isn’t that liberal or that socialist. Besides, why would socialists want to prop up the current system? The current system is largely private, just with gov backing. Wouldn’t the socialists want to cut out the middle man by letting the banks go down, and then rebuild the whole thing with a “public option?”
———–
Anyway, while I’m replying, I finally found the Eligibility Matrix for Fannie Mae loans. (you have to go to efanniemaeDOTcom and search for it, then click to get a pdf) This is from October 29, 2009:
For primary single family home purchase:
LTV 75% - 95% you need FICO 620.
LTV 74% or lower you need FICO 660.
For primary single family cash-out Refi:
LTV 75% - 85% you need FICO 620.
LTV 74% or lower you need FICO 680.
I don’t know if this info is right…I don’t see 80% (20%) down anywhere…
This looks like political jockeying. They want to scare the h$ll out of everyone with “tougher standards” and then, when the chicken littles go crazy, go to congress and ask the govt to give everyone a 20% down payment.
Almost:
Have the government give the banks the ability to loan us our 20% down payment (with interest to be paid on it) while printing the money for it from thin air (using the inflation tax.)
They just need to get everyone in debt, forever. “Buying” a house - where one really doesn’t pay for it - is just part of the process.
This government isn’t that liberal or that socialist. Besides, why would socialists want to prop up the current system? The current system is largely private, just with gov backing. Wouldn’t the socialists want to cut out the middle man by letting the banks go down, and then rebuild the whole thing with a “public option?”
Don’t try to bring logic into this. You’ll interupt the ranting and raving.
Note - Requiring a good credit history and a downpayment is not discriminatory. Red lining is.
“Besides, why would socialists want to prop up the current system?”
Because they all bought houses too, you know.
Besides, why would socialists want to prop up the current system?
If you consider the current system to be private, then that’s an oxymoron. Just the act of propping it up makes it socialistic, and no longer “current”.
There’s your answer.
It’s easier, and more profitable, to morph the current system into a socialistic one, than it is to let it crash and rebuild.
that someone would be the NAR
FHA seeks to amend mortgage lending rules
Federal agency pushing for bump in down payment, FICO score, insurance costs
http://www.chicagotribune.com/business/chi-tc-biz-swap-1202-1203dec03,0,2740944.story
“Vicki Cox Golder, president of the National Association of Realtors, said that last year, more than 50 percent of black borrowers and almost 50 percent of Hispanic buyers were using FHA-backed mortgages. In testimony Wednesday, she asked the administration and Congress to “tread lightly,” steering clear of any radical changes in the FHA lending program that helped families buy homes.”
How thoughtful of the NAR to want to keep home prices high for everyone!
NAR = National Association of Retards. Why can’t they see that by limiting the number of sales transactions, high housing prices are a shot in the foot for them? If prices bottomed out at affordable levels, lots more Used Home Salespeople could use their real estate sales income to buy food.
Vicki Cox Golder
Now that’s a name we Tucsonans remember fondly. (Not really.) She’s from these parts. And we wish she’d leave.
Comes from a long lineage I think. Some point off the Cataline highway is “Golder Ranch Road.” Drive all the way to the end of the paved road and park on the dirt. At that point you can find some good mountain biking for beginners - trails you would ride in the early part of the season to warm up for tougher rides elsewhere in the Tucson environs.
It is so weird seeing a government employee involved in a state-building adventure complaining about socialism. It’s like bizarroland.
They can get an fha loan at 3.5% down so what is the point?
That’s what I was thinking. Who cares?!
“In addition, Fannie Mae won’t approve loans for borrowers with a 20% down payment if more than 45% of their gross monthly income goes toward debt.”
45 percent of the GROSS? What’s that after taxes? 75 percent? What was it before? 100 percent.
Still insane. Whatever happened to 28 percent for the mortgage, 36 percent for all debt?
I make a good salary. I put the max into my 401k, have a small amount go directly to charity, put another small amount into a health flexible spending account and pay for my health insurance (approximately 70% subsidized for one person) before I get my take home pay. I live in a fairly high income tax state. I also put a small amount extra toward both federal and state taxes so I won’t owe anything April 15th. This amount is targeted so not that much is received as a refund, either.
If I only count 2 biweekly paychecks a month (the “extra” 2 paychecks each year fund the Roth IRA contribution), I take home only 47% of my paycheck. That essentially means that having 45% of gross income going to debt, would leave all expenses other than debt service funded ONLY by the amount saved by the mortgage interest tax dedcuction. So 25% of 45% of gross if you assume nothing lost to AMT and that all of your debt service is deductible which means that you are assuming no credit card debt in the mix. That is in the general vicinity of a thousand bucks to cover the following: heat; electricity; telephone; cable; internet; car payments; additional insurance such as dental, life, personal property, car, long term care, etc.; gas; food; entertainment; clothing; gifts, vactions; child care (if necessary); health costs above what is covered by insurance and the flexible spending account; etc.
Great idea, Fannie. Love your thinking there. Completely unworkable numbers. Guaranteed to default again.
Sigh. Haven’t any of these people ever lived on a contrained budget? I’m starting to think the three years I spent paying down my law school student loans were a bigger education than the three years I was actually studying for the degree.
polly,
Thanks for sharing that. Your candor is so much more refreshing and credible than “I ‘room’ with an FB, hitch hike to work and put -everything- into GOLD!”
Depressing.., but candid. ( My breakdown is about the same )
I think you need to run your numbers again. I am one of those evil rich people that should be taxed at 99.9%. And I put in the bank about 65-70% of my gross give or take. And this includes buying 100% of my health insurance and paying both ends of FICA, while you only pay 1/2 of it as an employee (I assume you’re an employee since you say you have a good salary) as well as federal and state income tax.
So either your math is wrong or you need a better accountant. Or your contribution to 401k/IRA is ~25% of your salary. Which is fine, but obviously not the norm. And since the cap for 401k is $16.5K and IRA is $5K, the effect on overall income from contributions is lessened as the income increases. For low income people, the effect is offset by the fact they pay little to no income tax.
401k contribution plus IRA contribution is about19% of take home. I don’t have an accountant. What on earth would I want an accountant for? To tell me I need to buy a house to get the tax dedcution? I specified the deductions that come out of my salary before I get to take home pay including the fact that I am not counting the extra two paychecks a year that happen when your bills are monthly and your salary is every other week. Most of my charitable contributions during the year are taken care of before I see my salary. Money to cover some medical and dental bills are too. And enough extra tax deduction so I don’t get nailed in April. That is why those expenses are not included in the list of stuff that has to come out of the $1000 each month.
The math is trivial. Yearly pay divided by 12 in the denominator. Two times the paycheck take home amount in the numerator. I even rounded up the take home pay by about $16 a month.
All you are proving by your insistance that my numbers are wrong is that the rich have a lot more disposable income than the middle class. I assume you do not dispute that people who make over $100K should be able to max out their 401k accounts, or do you?
Eddie,
No offense but any time “I” have gone to make a bank deposit ( the teller is only interested in the ‘net’ amount of your deposit )
SEP Contributions run a little differently ( and yes there are still some old timers like me that prefer them ) Recall that the original context was that of DTI limitations they are now considering “normal”?
Since many here try to “out frugal” one another I just thought polly’s candor was refreshing that’s all?
Dinor, nothing wrong with a SEP. I have one myself. The max contribution is $49K a year, 100% deductible. Can’t beat that. For 401k it’s only $16K max. It’s a no brainer to go the SEP route.
Polly…this is why I have an accountant, he figures out how to avoid paying taxes to Barry and his gang of thieves. Well worth his fees. And no TurboTax doesn’t do the same thing.
I don’t really care what you do with your money. But if your “take home” pay is 45% something’s not right either in the math or in how you allocate expenses/income or in your taxes paid.
As to the not getting nailed in April….why not? Withhold as little as legally possible, put the difference in an investment, even a lowly savings account and pay what you owe in April. I cannot for the life of me understand why anyone willingly gives the govt an interest free loan every year when they don’t have to.
I guarantee you I know as much tax law as your accountant. Probably a heck of a lot more.
You are a consultant, right? I am an employee. My employer covers all my work related expenses. You can’t compare our situations unless you use your income AFTER all your business deductions. I don’t have any business deductions because I don’t have any business expenses. My tax deductions are state income tax paid, county income tax paid, and charitable donations. My income is salary plus bonus plus interest and other investment income. That is it. And the numbers work out so that 12/13’s of my take home pay is less than 50% of my base pay. That is the real world.
You can’t really be this naive about money, can you? Surely you know that whatever your accountant is doing to reduce your tax bill is related to business expenses, right? Or something to do with an HSA? Or child care expenses? Or are you still paying off student loans? Come on, Eddie. Exactly what sort of deductions do you think a good accountant could find for me?
“……take home pay is 45%, something is not right……”
Actually, for average J6P, who isn’t self employed, that’s about right, after you subtract, Federal, State, and local income taxes, Social Security, personal property taxes, various local levys for God knows what, Excise taxes for the Spanish-American war, tolls, user fees, etc. etc.
But of course, we all don’t operate in the rarefied air of Eddie-land……from your posts, I assume you are self-employed? The tax code is really friendly to you guys……..all kinds of ways to reduce/dodge taxes that aren’t available to the regular Joe.
The W-2 receiving, income withheld, typical J6P turnip has been squeezed until there is no blood left. The taxing authorities are thrashing around like someone drowning, looking for new sources of income.
It will suck to be you, especially if your accountant has been a little too “creative”.
HAHA, so now you’re including phone bill taxes and child care expenses as part of non-take home ncome? OK then I guess my “take home” pay is close to 0% if I include food, rent, auto insurance, health insurance, going to the movies, going on vacation, SEP contributions, a summer afternoon ice cream cone in the park and haircuts.
You are mixing and matching employment taxes with personal expenses. In which case your “take home” can be anything you want it to be.
Take home pay in the traditional sense is gross income - tax - fica - insurance. And using that metric no way in hell anyone is at 45%.
If they start taxing me at Barry wish list rates, I’ll get some dead end $50K a year job to pay the bills. I’m not working 60 hours a week to give 40 of those hours to Barry and his gang of thieves.
I listed phone, child care, etc. as items that had to be paid for out of the take home pay that was left *after* paying 45% of gross for debt service. The only items I took out of gross pay to get to take home pay were listed at least twice in my other posts. Your straw men areguments indicate that you couldn’t answer the question about tax deductions for W-2 employees so you decided to lie about what I wrote to cover your ignorance.
It really is kind of sad.
“dead end $50K a year job.” What a self-righteous, show-off snob.
“Haven’t any of these people ever lived on a contrained budget?”
Polly, please repeat after me:
There is no macroeconomic budget constraint.
There is no macroeconomic budget constraint.
There is no macroeconomic budget constraint.
…
If you recite this often enough while staring in the mirror, you, too can think like a macroeconomics expert.
When you can print endless money and just sock it to others with inflation, the lack of constraint is (sort of) true?!
“…the lack of constraint is (sort of) true?!”
I don’t agree. Failing to ever acknowledge a basic principle does not suffice to falsify it.
For example, the Catholic church failed to acknowledge that the sun does not revolve around the earth for a long time after Galileo Galelei correctly argued otherwise. And many geophysicists of note (Sir Harold Jeffreys among them) refused to accept Alfred Wegener’s theory of continental drift (in 1915), which later turned out to be largely correct. It was not widely accepted in the scientific community until the late 1960s.
I am 100 percent convinced that (1) there is a macroeconomic budget constraint and (2) the macroeconomics profession will eventually be forced by economic reality to acknowledge its existence by including it in their models. This is only a matter of when, not if.
Are we sure continental drift isn’t a liberal/ media conspiracy? To transfer land from the northern hemisphere to the southern hemisphere? Teach the controversy.
I put the max into my 401k, have a small amount go directly to charity, put another small amount into a health flexible spending account and pay for my health insurance (approximately 70% subsidized for one person) before I get my take home pay.
Umm, Polly, aren’t you in that Wonderful Federal Health Insurance Exchange that we’ve heard so much about? The one that gives you so much Choice? And Competition Among Plans?
Sounds like it’s not such a great deal after all.
Hey the federal health plan IS pretty good, just not quite the amazing wonderful gold plated wonder that some would claim that it is. Of course one of the things that’s good about it the great amount of choice that one has, and that’s primarily a function of it’s size. There are enough federal employees that most insurerers are available through it. Of course the deal is best for those with many children, since they pay at the same rate as a married couple.
Of course I suspect that like me, she DOES put 20-25% of her income into 401k + IRA.
I put in about 19% of salary in 401k plus Roth and the government “matches” another 5%.
Our plan does not give you 100% free health insurance premiums for a plan with no co-pays or anything like that. The federal government isn’t a push over like the states evidently are. My BC/BS plan gets me a lot of access. I think it is going up to about $80 for each two week pay period for a single person for next year, so vicinity of $173 a month. I paid more than that for access to NYU student insurance.
If you were paying the whole pop by yourself it would be close to $600 a month. But the in network coverage is very good, especially in the DC area.
You work for the govt, so you should be retired at what 52 and with full pension and benefits. All that and you’re complaining about $173 a month for. Unreal.
a) I am not complaining about my health insurance. It is a pretty darn good deal. Just not completely free as so many people claim the state and local government employees get. A number of folks around here lump all government employees in with that crowd. It simply isn’t true.
b) Federal employees can’t retire at 52. Again, you are thinking of state cops or local firefighters. Not the same thing.
c) Federal employees who were hired after some date in the early 80’s don’t get a “full” pension with 2% of last year’s pay per year of service with the government. We will get one percent per year of service and the absolute maximum is 40% no matter how many years you work. Under the old system, they maxed out at 80%. And nothing but base salary and locality adjustment is included so people who get overtime can’t game the system and retire right after a year with a lot of overtime. Again, that is an issue for state workers. Not the feds.
Govt, state/county…tomaytoe, tomahtoh. You all eat from the same trough of taxpayer money.
It’s funny how so many here go apeshit over someone on Wall St getting a bonus but don’t even blink at the graft that is government employment. So you don’t retire at 52, you retire at 55 and instead of full benefits you “only” get 40% of your inflated salary. And that’s after “working” for 30 years with 3X the amount of the average vacation and every holiday known to man. I mean come on who else but a government worker gets Columbus Day off? And all this with the knowledge that you basically have to commit mass murder to ever get fired and then only after your union rep has been consulted.
Don’t get me wrong, if you can stomach the boredom and tediousness of working for the govt for 30 years, great. I couldn’t. But if you can, do it. All the power to you. Grab the gettin’ while it’s good and munch down as much as you can at that trough. But just please don’t complain about how tough you have it.
EddieTard…. don’t let facts and reality get in the way of your twisted rhetoric.
“Home buyers need good credit score even with 20% down payment.”
I don’t see this mattering so long as there is a two-tiered mortgage market with the second tier consisting of government-sponsored subprime lending. What evidence do you have to offer that Subprime Sam is getting out of the mortgage lending subterfuge business?
Secret to govt-sponsored “market-based” affordable housing policy:
1) Hammer the middle class with high housing prices, 20 percent downpayments and high credit score requirements to qualify for a loan;
2) Open a backdoor for specially favored groups to get govt-sponsored, govt-guaranteed subprime loans which let them buy and temporarily live in houses which they cannot afford, and which are likely to end in future mortgage default.
I think this is a good chunk of the plan:
1) BAD: Honest people being able to afford a house and live in it for decades in peace.
2) GOOD 1: People struggling to make their payments, being dependent upon the “kindness” of the bankers and government to “afford” their houses for a few more months - and they’ll vote for whichever politician gives them the most government cheese. Then, they lose the house anyway and more money is made from flipping it to the next sucker.
3) GOOD 2: Selling houses cheap to insiders who can then become slum lords or flip them to make a nice profit.
Isn’t it great our our innovative eCONomy works!
finally…a step in the right direction at least.
“20% down if more than 45% of their gross monthly income goes toward debt” is hardly a mandated 20% down.
If therefore someone is paying 35% of their gross monthly income toward debt, it means they don’t need to put anything close to 20% down.
From the Chicago Sun-Times, some recent commercial real estate transactions:
1. 110,000 sqft suburban office building, $32M. [$300/sqft]
2. 40,000 sqft industrial building, $1M. [$25/sqft]
Quite a range. No word on terms.
In a city with as much commercial + industrial space as ours, those figures seem largely meaningless, or at least lacking context. Industrial buildings often sit for years without a major tenant.
I wouldn’t be surprised to see industrial space going for lower than $25 / sq. ft., based on location, condition, and zoning issues. Heck, the old Post Office at 433 West Van Buren went for $40 million at auction in August — about $13 per square foot. That site will need $750 million to a $1 billion in additional investment, according to the local alderman, Fioretti. Great deal, or monkey on back? Time will tell.
The old Post Office ORIGINALLY sold for $40mm back in August, but the bidder missed a few deadlines to pay up. The bidder was able to negotiate the bid back down to $25mm. Love that.
http://www.suntimes.com/business/1941973,CST-FIN-roeder16web.article
Oh, I missed the follow-up drama. Even better.
Thanks for the link!
.
Of course there is a wide range. Real estate is highly inefficient, which is why people can make a lot of money digging through the rubble.
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504534.html?hpid=topnews
The Federal Government “quietly” gave Citibank, and presumably other “troubled” banks, a sweetheart deal on future taxes that will allow Citi to avoid paying BILLIONS on ill-gotten future gains. Call it another back-door bailout, not to mention a back-door “forced entry” on taxpayers.
“Change We Can Believe In!” my a$$.
Citibank was the number one contributor to Obama’s inaugural bash. Purely out of the goodness of their heart - no quid pro quo from our champion of honest government.
Please. It is both much more and much less subtle than that. Lots of the Treasury political appointees were trained up by Robert Rubin. The primary importance of the big banks is how they think. This deal would have happened even if Citibank hadn’t given a dime to the inauguration.
Given that it was the top headline on the Washington Post website late last night and not even mentioned by New York Times, I’d guess it was a leak and never intended to be public. I sure hope so. This kind of backroom crud makes me physically ill. If someone in the know leaked it (real leak, not an officially sanctioned “leak”), it means there is someone out there who also didn’t like it. Small hope is better than no hope.
Given that it was the top headline on the Washington Post website late last night and not even mentioned by New York Times, I’d guess it was a leak and never intended to be public.
Good catch.
It’s only a small sub-headline on the NYT page at the moment, under “As Goldman Thrives, Some Say an Ethos Has Faded,” and the article is pretty sparse. Looks like The Gray Lady is playin’ catch-up on this one.
You have to wonder when “What’s good for General Motors….” got transmogrified into “What’s good for Goldman Sachs….” At least took steel and added value by turning it into cars. Say what you will about the quality, they did have more utility than a ton and a half of sheet metal. Of course the anti-banker rhetoric here rivals the anti banker rhetoric common in the depression.
Sammy,
Yes ( I’m negotiating similar, ahem, “arrangements” w/ the IRS myself! )
Still, they aren’t out of the woods yet? There’s no assurance Citi will even survive to ‘return’ to profitability? But I agree, it’s a dangerous and unprecedented generousity. More Corp. Welfare.
How’s that hope and change working out for you?
Good point. Citi’s balance sheet has been so Enron’ed at this point that there is no way to know how much trouble they are in from the outside. Bad stuff held in a “bad” sub, not marked to market and no way to know how low it will go.
Maybe this is actually a better deal than having the Fed buy up all the toxic waste from the bad sub. With tax benefits, there is a possibility that they will never become particularly valuable to Citi. For example, if the toxic waste starts to lose value again and keeps crashing until it takes down the company.
polly,
Right, better said. I see it as carrot & stick. If they can manage to pull out of their tailspin.., then we have some goodies for you!
If not, then why did we even ‘attempt’ to bail them out in the 1st place? I just see it as the Gov. protecting our investment. Look around, there’s lots of this going on.
Thanks for reposting Sammy!
OK, liberuls. Splain this one away for me. See cause I dont thin theyun difference tween the demcrats an publicans.
Sounds like a 40B gift to Citi that allows them to pay out big bonuses with the ugly TARP off their heads.
Oh, I guess they are going to audit the Fed and we can see who stuck assets in the TALF. Shouldn’t they be buying those back as well? Right?
I’d guess the FDIC doesn’t need to offer 250K insurance on their accounts any more?
I’m missing some stuff here…. How much harder can we get fu*ked on this deal?
So what else is new?
Reuters, April 12, 2008
Study says most corporations pay no U.S. income taxes
The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.
More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.
During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.
The report did not name any companies. The GAO said corporations escaped paying federal income taxes for a variety of reasons including operating losses, tax credits and an ability to use transactions within the company to shift income to low tax countries.
That’s a largely meaningless stat if you asked me.
7 years with a rough period in the middle means that most of those companies probably didn’t earn a profit every year.
No profit, no income tax.
Not only that, it’s so broad that you can’t even do any back of the envelope audits to see if any fraud from a big name occurred.
The first of the main stream media I have seen to say housing may go further down….
Take a look at the reasons, as well as the last sentence..
Another plus: He says there’s almost zero possibility of another U.S. housing bubble anytime soon
http://money.cnn.com/2009/12/08/real_estate/housing_outlook.fortune/index.htm
Looking at an estimated -9% in the Philly area. Hmmm… Still not quite enough for my liking, but better than an estimated +.
What about when the free money stops? And, heaven forbid!, interest rates go up? What then?
The free money is still a big problem around here. Everyone keeps telling me I need to get that $8K while I can! The mentality is still off.
“Everyone keeps telling me…”
Rarely in life do we get as clear a warning sign as the above phrase.
Nice, they are predicting a 19% drop in Los Angeles. I hope South OC follows suit. I’m patiently renting in Laguna Niguel, hoping to buy late next year. I’m looking to pay about $175 a sq foot in Laguna Niguel.
Get a clue — the housing bubble lives (although it is in the wasting stage of terminal illness).
We could easily be looking at another 20 years of this.
Wonder what they were saying in Japan after the first 3 yrs of decline? Probably lots of Eddie’s had yet to commit suicide.
It has become so similar. The extend and pretend. The token repayments such as Citi above. Govt running up massive debt.
Oye.
We are already seeing a massive dollar carry trade too.
This will end very much like Japan, only with a much lower standard of living for all of us.
Years of no real gains in the stock market.
Years of randomly drifting housing prices: too high to really afford, too low to be able to “only go up,” and lots of corruption and crumbling houses/neighborhoods tossed in for good measure.
Years of corruption and lurching government attempts to “fix” things that are not broken while breaking the things that should be fixed.
Years of abuse for savers as the dollar slides into oblivion.
Looks like fun!
…and decades of declining wages for J6P.
The rising vector of prices has to cross the falling vector of wages sometime. If not his time, then next time. And next time looks to be within 10 years.
The other factor supporting prices on their temporarily high plateau besides myriad extraordinary market-distorting government interventions is a continuation of the irrationally exuberant hopes for high future price appreciation rates which were a key underpinning of the bubble. Once irrational exuberance gives way to post-denial-phase economic reality, I expect price declines to resume until the market reaches a bottom some time over the next two decades. Hopefully it will not take U.S. housing as long to bottom out as it has the Japanese market (two decades and counting so far)…
http://www.randpaul2010.com/
Dr. Rand Paul (son of Dr. Ron Paul) is having a money-bomb fundraiser today; hopes to raise a record $6 million in his bid for Kentucky’s senate seat. His GOP opponent is a typical RINO hack, backed by the Establishment GOP apparatchiks who are nothing but corrupt whores for Wall Street and their K-Street bagmen. If you want a voice for responsibility, accountability, and Constitutional (not fake “family”) values in the Senate, here’s your chance to step up and DO something - and poke your finger in the eye of the Republicrat Establishment while you’re at it.
Similar things are happening on the Democratic side. I’m on the e-mailing list for a Dem who’s hoping to take out a longtime Senator in the 2010 election. And he has a good chance of doing so.
Something I (and probably 99% of fellow HBB readers) have been remiss on is remembering to click the links for advertisers on this site. Each click & read puts a tiny fraction of a penny in Ben’s pocket & encourages advertisers to continue sponsoring ads on this site. Of course the very BEST way to show our appreciation to Ben is via generous, regular direct contributions - but patronizing site advertisers is a good habit for those of us who really value this site.
How Likely Is Hyperinflation?
Have central bank and government reactions to the crisis created a large danger for the future?
Though the Fed thus initiated the crisis, we should not forget that it would never have taken such a dramatic course, which hurt the real economy, were there not other well-known defects in the financial system such as:
1) Banks neglected to maintain a sufficiently diversified portfolio.
The percentages of own capital required for banks by internationally agreed rules (Basel II) and the valuation at market prices adhered to during the crisis exacerbated it.
2) The compensation systems for leading managers were based far too much on short-term performances.
3) The control system within banks failed.
4) Rating agencies financed by their customers grossly misjudged the values of firms and assets.
5) The measures by the U.S. government to ease the buying of houses by relatively poor people proved mistaken.
6) American liability rules in case owners could not pay the interest on their mortgages encouraged levels of indebtedness that were too high.
7) The liability rules for gross mistakes by leading managers of business firms were too restricted.
9) The permission by Basel II for banks to employ their own models to evaluate risks was a mistake.
10) The control of financial institutions by government agencies failed.
11) The lack of knowledge of economic history by leading managers encouraged them to take overly risky decisions.
“But does this mean that inflation may evolve into a hyperinflation in the United States? I believe not. Though it is true that budget deficits with government expenditures covered by 40 percent or more through credits have historically led to hyperinflation, it has been stressed in Monetary Regimes and Inflation that it is not only the size of these credits but also their composition that is important. This is noted in the book thus: “It will be demonstrated by looking at 12 hyperinflations that they have all been caused by the financing of huge budget deficits through money creation“ (p. 70 ). ”
http://www.american.com/archive/2009/december-2009/how-likely-is-hyperinflation
I am not convinced by this article that we won’t experience hyperinflation, IMO probably a mixture of deflation and inflation, but I was wondering what the HBB crew thinks?
Thanks in advance for any comments regarding this subject,
Lip
This article is Keynesian gobbledygook. And there is a serious logic problem in the last paragraph from which you quoted:
Though it is true that budget deficits with government expenditures covered by 40 percent or more through credits have historically led to hyperinflation, it has been stressed in Monetary Regimes and Inflation that it is not only the size of these credits but also their composition that is important.
Then, later in the paragraph:
by far not all of the credits borrowed by the government were financed by the Fed. According to preliminary and rough estimates, not 40 percent but “only“ about 13 percent of U.S. expenditures are presently financed this way.
So he’s comparing two different percentages: 1) the %age of government expenditures financed by borrowing, and 2) the %age of government borrowing financed by the Fed.
Highly unconvincing IMO.
Lip …I don’t know why they avoid the subject of all the unregulated games played by the Banks and investment houses . Bring back
Glass-Steagall and you remove the regulated playing high risk games ,as least to a large extent . They never talk about how big the securities world was for the lending from Investment houses and hedge funds .You can’t leave it up to mangers to judge , or regulators ,you have to have rules limiting the games that you know human nature violates .
The lobbyist are trying to stop true reform because if they are limited
than they can’t take on as much risk or leverage,or play short term Casino games and make as much money . These jerks can’t be trusted with other peoples money . So what if reform limits the amount of money they can make ,so what .Wall Street proved that they abuse
leverage ,they don’t have necessary reserves ,they abuse the Casino games ,they try to get other peoples money by faulty ratings ,they
have strong lobbyist and they control advertising for the sole purpose of fleecing the masses for short term gain . They want to churn accounts and create a never ending flow of commissions .
When the Investment Houses and the Banks were let out of their
box by deregulation,look what they did , The proof is in the pudding. They did it in 1929 also and they will always abused other peoples money if they get their dirty hands on it with out extremely hard line rules . This does not take away the fact that you can have high risk
venture capital ,but it can’t mix with the regulated and protected
areas of the financial world .
I think we will get inflation ,but I don’t know if it will be on the level on hyperinflation in a short time (The inflation might be dragged out ) It’s hard to say what will happen .
I expect anything really .
FWIW, I’m somewhat concerned about high (maybe not hyper) inflation. Inflation is a great way to fix this mess, savers (the 6 of us left) are scre***ed, but the housing bubble gets fixed and debtors get another lease on life.
I’m holding some gold as a defense, and stocks, IMHO, are also defensive against inflationary pressures. My buddies who work in banks and in finance are buying gold hand over fist, that’s never a comforting sign (IMHO) when the “educated” finance guys are buying gold/inflation protection at that rate.
Part of the difficulty in these discussions is that to many in the blogosphere, a “high” inflationary wage/price spiral IS hyper inflation. They can never seem to realize that there is a real, qualitative difference between the U.S economy of the late 70s/early 80s and Weimar Germany or current Zimbabwe.
Explain, please. What is the qualitative (as opposed to quantitative) difference?
Our debts are in our own currency seems a qualitative difference, no?
Is it a comforting sign that your “educated” bankster buddies nearly toasted the world economy with their brilliant mortgage financing? they’ll probably toast gold too.
(Then again, “past performance is no guarantee of future gains…”)
To my American eagles and buffalos health! LOL. I buy one ounce increments and no less unless it’s in French Angels, British Sovereigns, or Swiss Francs.
Housing Starts in U.S. Climb 8.9% to 574,000 Pace (Update1)
Dec. 16 (Bloomberg) — Builders in November broke ground on more U.S. homes, a sign the recovery in homebuilding may carry through into 2010.
Housing starts rose 8.9 percent to an annual rate of 574,000, the Commerce Department said today in Washington. Building permits, a sign of future construction, climbed to the highest level in a year.
Government tax credits, lower home prices and borrowing costs near record lows may boost sales and construction in coming months. Federal Reserve policy makers today are forecast to reiterate a pledge to keep rates low for “an extended period” to sustain the recovery and lower a jobless rate that economists project will average 10 percent in 2010.
“Mortgage rates and home prices are at very low levels and this is enticing some buyers back into the market,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “Until the unemployment rate falls further, the housing market is not going to recover in a meaningful way.”
Higher fuel costs caused consumer prices to climb 0.4 percent in November, matching the median forecast of economists surveyed, according to figures from the Labor Department also showed today. Excluding food and energy, the so-called core index was unchanged, signaling inflation is contained.
That’s right….. keep on building.
Just as long as they realize that for every new house they build the PTB has to conjure up yet another buyer.
Ha, maybe one day they’ll force us to sign mortgage docs at gunpoint?
edgewaterjohn,
The truth can be stranger than fiction. When your over-extended FB/Loanowner LL has to de-leverage..?
“Mortgage rates and home prices are at very low levels and this is enticing some buyers back into the market…Until the unemployment rate falls further, the housing market is not going to recover in a meaningful way.”
Housing is recovering…but unemployment is high so housing is not going to recover. Geez, it’s like this guy drank the kool-aid and threw it right back up. Do these geniuses understand that all these news houses are going to be completed at the exact time as the shadow inventory finally comes out of the shadows? Way to decrease supply, numbnuts!
It’s called moral hazard
They think that the gov will provide even more stimulus so that the houses they build can be purchased. Maybe the house credit will go to 50k.
I was listening to a call-in show yesterday about home repairs. It was probably no coincidence that all the local home repair tradesman had increased their pricing on window replacements by the allotted tax credit amount. That was what the caller was complaining about. Someone on this forum, I think, made mention that solar installations in California are higher cost than out of the state sources because of credits possibly. So, let them tighten the tourniquet of housing by offering credits that will incite the REistas into bidding wars. How can they engineer a soft landing if income is not even commensurate with the costs?
AbsoluteBeginner,
What an interesting wrinkle. They haven’t even fully approved it yet and these guys are already lining up w/ their hands out! Ah well, I guess that’s how we ‘do business’ in this country any more?
While we’re at it! We’ve hammered on pergraniteel -forever- here but hardly ever a mention as to how freaking windowz got so damned expensive. Don’t get me wrong, they’ve never been cheap but how did they become “window systems”?
Low-E reflecting high tempered glass and bids of 10 and 12 grand for an avg. house? Not advocating going back to leaded glass single pane, but it’s a major part of the cost in any home. They’re windowz people.
There is already a $1500 tax credit available for energy efficient projects, it pays 30% of the cost of the project.
I had my windows replaced in the Spring and the tax credit plus the utility credit paid about 40% of the cost. It paid to shop around though, the first bid was $17,000 which was out of the question. I found another guy selling a different brand but quality window that did the job for $8,000.
I don’t know about winter efficiency yet, but the low e glass did wonders for cooling last summer.,
measton,
Not sure if you intended that w/ sarcasm ( pretty sure ) but don’t laugh. It’s entirely possible they might continue to push the envelope until they ‘do’ hit the number that entices buyers.
The longer buyers sit on the sidelines, the more ridiculous the number is likely to be.
Also, unintended consequences of higher house prices problem may fester. In increasing interest rate environments, will house prices increase? How about helocs of the future and the pandora’s box of what the next crop of FBs do when they can not juggle a house payment and the ever-shrinking take-home paycheck?
The “shadow inventory”, ie. homes in default that haven’t been foreclosed upon and put back out to market are, to my understanding, still full of people.
When that shadow inventory comes onto the market, that family will be looking for a place to live…perhaps a rental, taking up space somewhere else.
It’s more a game of musical chairs than a wave of empty homes ready to be unleashed upon the market.
Jobs are a big deal though. Without new jobs, you have more people doubling up on apartments, living in mom’s basement, etc., and fewer people deciding to take advantage of favorable long term interest rates and prices such that ownership cost is less than rental cost.
Jobs are a big deal though. Without new jobs, you have more people doubling up on apartments, living in mom’s basement, etc., and fewer people deciding to take advantage of favorable long term interest rates and prices such that ownership cost is less than rental cost.
You hit on it there.
Despite housing starts having been at record lows for 15 months running now, rental vacancy rates are also at record levels - high that is. This means that incredible consolidation is going on.
Which means, once there is some recovery in the job market, combined with low interest rates, there could be a quick move up in home prices until it is feasible to develop raw land again.
I’m thinking a “square root sign” recovery, not a “V”.
You still have some household creation going on, people who had jobs, but were living at home getting married and moving out.
I think musical chairs is about right. Vacancy rates may be relatively high, but pretty stable right now…not getting substantially worse.
I’m guessing that there will not be a steady rise in these numbers. Many of the lots that are being built on were acquired at prices LESS than replacement cost. Thus the homes that are being built and sold today are being built and sold at less than hard costs, and able to compete with foreclosures.
Once these lots have been built upon (12-18 months? in some places sooner, in some places later) then home prices will need to go up in order justify the construction of new lots and then new homes.
My prediction is that home starts will creep up and then begin to slide downward again within 12 months…UNLESS there is a 10-20% rise in lower priced homes in the meantime, in which case home starts will continue to rise.
Right now though the rate of foreclosures hitting the market - about 3M per year - far exceeds the number of new builds - still under 600k per year. New starts right now are mere noise in the price equation, and will continue to be so for far more than 12-18 months, IMO.
I agree in terms of price pressure. However, none of the factors are independent. Since this mess started, how much has the US population grown? 3 million per year annually? Once there begins to be job creation again (we are close), there will begin to be a decrease in vacancies across the board, and thus a rise in prices (rents and home prices). Any such rise in home prices will slow foreclosures, and banks will be even LESS apt to sell, and fewer people will be strategic foreclosure fans.
The thing to keep in mind, is that real estate IS local (it was the credit market that is global). This is especially the case in terms of supply/demand and timing of a recovery. In some places, the foreclosure mess will work itself out a lot sooner, jobs will recover faster, etc. This will give a boost to home construction numbers in those locations even though some places will still be sucking wind.
This will be a boost nationally because EVERYONE was down for so long. A move to where just SUBSTANTIALLY ALL markets are bad will be an improvement, but not time to throw a party.
No surprises here, but it appears the House’s financial reform package fails to end too-big-to-fail. Looks like your and my kids get to enjoy the pleasure of regular financial crises in their futures, brought to them courtesy of the banksters of Megabank, Inc.
* The Wall Street Journal
* DECEMBER 16, 2009
Finance Fixers Still Living in Denial
By PETER EAVIS
This is denial, not closure.
The House of Representatives has passed an ambitious-looking financial-overhaul bill. Meanwhile, Citigroup and Wells Fargo are following other major banks in paying back government investments made under the Troubled Asset Relief Program.
These and other developments suggest lawmakers and regulators are bringing an era of banking-sector instability to an end. But a chief cause of that havoc—a government willingness to bail out banks considered too big to fail— remains.
As a result, the U.S. economy could continue to suffer from a bloated financial sector, and taxpayers will continue to implicitly subsidize and possibly bail out large banks.
A small number of lenders now dominate the economy. The top four banks have combined assets of $7.4 trillion, or 56% of the U.S. banking sector’s total.
In 2000, the top four’s $2 trillion of assets accounted for 35% of the total.
In the past 30 years, large banks have facilitated significant increases in leverage across the economy and stretched their own balance sheets. Financial-sector debt reached 118% of gross domestic product at the end of 2008, up from 18% in 1978.
Confronted by the banks’ enormous size and their role in the crisis, lawmakers could have demanded smaller, simpler institutions. These would be much easier to regulate, and most important, they could fail without too much economic impact.
Knowing the government could then let lenders collapse, bank creditors would think much harder about to whom they lend, reducing the chance of future credit bubbles.
Instead, the House bill deals with the big-bank problem simply by introducing more regulations, including tougher capital requirements for systemically important firms and potential limits on short-term debt.
…
I hear the voice of one crying in the wilderness:
Real Time Economics
Economic insight and analysis from The Wall Street Journal.
* December 9, 2009, 4:39 AM ET
Volcker: ‘No Time for Return to Business as Usual’
History generally shows that destructive behavior by the PTB is not usually stopped by anything short of total disaster.
It took a major depression, a coup attempt on the government and an impending world war to pass the last reforms.
The Republicans don’t pretend to care about trying to prevent another financial crisis. The Democrats pretend to care, but do nothing.
It’s like the Republican behavior with fiscal conservativism and government spending. They pretend to be against it, but spend with as much abandon as Democrats. The Democrats don’t even pretend to be against high spending.
Symmetry. The common theme? Politicians are feckless and venal.
The most important government reform that could ever happen would be term limits for the Senate and House, just as there are for the president. This is the only way we can limit “regulatory capture” (aka legalized bribery).
This should be welcome news to anyone who is long the Norwegion krone. It is interesting to see other countries take the first-mover advantage away from the Fed in taking away the easy money punch bowl.
Dec. 16, 2009, 10:13 a.m. EST
Norway’s central bank unexpectedly hikes rates to 1.75%
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) — Norway’s central bank decided on Wednesday to increase its benchmark interest rate to 1.75%, surprising the market and triggering a rally in the Norwegian currency.
Norges Bank raised the policy rate by 0.25 percentage point to 1.75%. Most analysts expected the bank to stay on hold.
“The executive board considered the alternative of keeping the key policy rate unchanged, but interest rates are low and the October increase in the key policy rate has had a limited impact on bank lending rates,” the central bank said in a statement.
…
At least the dollar is holding up well today against the Russian ruble.
From Bloomberg:
CURRENCY VALUE CHANGE % CHANGE TIME
EUR-USD 1.4587 0.0049 0.3371% 11:08
GBP-USD 1.6410 0.0142 0.8742% 11:08
USD-CHF 1.0346 -0.0058 -0.5589% 11:09
USD-SEK 7.1491 -0.0498 -0.6921% 11:09
USD-DKK 5.1015 -0.0171 -0.3341% 11:09
USD-NOK 5.7398 -0.0828 -1.4212% 11:09
USD-CZK 17.9940 -0.0600 -0.3324% 11:09
USD-SKK 20.6560 -0.0668 -0.3222% 11:08
USD-PLN 2.8586 -0.0359 -1.2403% 11:09
USD-HUF 189.5550 -2.0900 -1.0906% 11:09
USD-RUB 30.2110 0.0195 0.0646% 11:08
USD-TRY 1.5052 -0.0046 -0.3014% 11:09
USD-ILS 3.7730 -0.0128 -0.3368% 11:08
USD-KES 75.2000 -0.0250 -0.0332% 09:35
USD-ZAR 7.3790 -0.0552 -0.7432% 11:09
USD-MAD 7.7876 -0.0213 -0.2724% 11:08
USD-ZWR 322.3550 0.0000 0.0000% 11:04
Good call by Chuck Butler (Everbank) a few months ago. He specifically called out the Krone as having future strength.
I bought some a while back (well before the massive flight-to-quality into Uncle Buck during Fall 2008). As usual, I was early, but my wife will be happy with how things went this year…
As usual, I was early, but my wife will be happy with how things went this year…
Quite a disparity between: “I was early” … & “…wife will be happy with how things went this year”
Jay Leno to Hwy: “Oh, just shut up!”
For the curious, a one-month increase of 0.4% occurs at an annualized rate of (1.004^12-1)*100 = 4.9%. And the price of my favored cheap bottles of wine at Trader Joe’s suggest that inflation in consumer staples is ramping up at a much faster rate.
But inflation is a good thing, as it is the antidote to deflation (aka Bernanke kryptonite). Its appearance suggests that wages can soon increase, and higher wages are what is needed to get housing price inflation back on track. Our economy depends more heavily by the day on monetary manipulation of prices and householder perceptions, so these developments should only be viewed as positive.
Economic Report
Dec. 16, 2009, 8:39 a.m. EST
U.S. consumer prices rise 0.4% in November
CPI marks first positive year-over-year gain since February
…
Three-buck Chuck?
Two-buck Chuck is staying true to their name so far. And sales are brisk, as close substitutes have recently gone up in price from $4 to $6.
It is already three-buck Chuck here in Chicago and has been for the last couple of years. Illinois has high alcohol taxes.
High booze taxes. High restaurant taxes. High cigarette taxes. And they’ve gone up considerably over the course of the last decade or so.
At least my wife and I quit smoking -
Does anyone still wonder why the banks are holding onto their huge shadow inventory of foreclosures?
Buy now or be priced out forever.
Buy now or enjoy cheap rentals forever.
Observation on rentals. I mentioned previously that I had been all over cl and driving around in Oct preparing for lease end 12/31 and finding something nice for much less. 3/2 close by -offered 400 less with 2yr lease- agents never offered the owners our proposition which is a negotiating point anyway, Plus the 3/2 condo isn’t upgraded in anyway compared to so many houses avail for 1600 and gorgeous=owners begging for lessees.
It is still empty, no showings.
Other 2/2 condo with 1 gar = agent snippily suggested unless ‘we’ had near perfect credit, they wouldn’t look at ‘us’. Well, with several yrs of perfect rental credit aside, drove by this evening and 2 mo later unit is still available.
Add those lost months together of lost rental/overhead.. bad move by agents/owners.
Lots of stuff is still listed and available, just 2 examples.
Makes no sense to me. After all, unoccupied houses don’t increase in value.
If anything, they do the opposite. Something about entropy, not to mention vandals, at work…
Houses? Pah, who cares about the actual house. The “value” of toxic assets behind the house is where it’s at.
Bingo.
From the bank’s perspective they are very much increasing their value, since as time goes by there’s less and less they have to write off, as they’re able to unload their toxic mortgages on the Fed.
“…as they’re able to unload their toxic mortgages on the Fed.”
Would this topic be fair game for the Congressional auditors to discuss, or is snapping up toxic mortgages considered a part of normal monetary policy operations?
Because Bill, there is no “huge shadow inventory” don’t ya know
Those empty houses are just empty..they’re not Foreclosures !!
We’ve already “worked thru” all of our Foreclosures in DC/NoVA
The Banks aren’t holding on to them !! (wink, wink, nudge, nudge)
Like I wrote above, the ones here are either destroyed by the previous owners (and will take > 50K to repair) or are full of Black Mold
The Banks still want 750K for them & many idiots here are paying it, cause everyone is moving to DC cause we still have jobs…
But inflation is a good thing, as it is the antidote to deflation (aka Bernanke kryptonite). Its appearance suggests that wages can soon increase,
Let me know when that happens. Wage inflation is a distant dream.
Let me know when that happens. Wage inflation is a distant dream.
Being that the Senate just approved a 12% spending increase for 2010, consider yourself informed.
I suppose technically all of the 12% increase isn’t directly “wage inflation”, however 2% is.
That would be inflation - including wage inflation.
So 0.5 to 1% of US civilian work force will get a 2% raise.
Now look at state workers getting furloughed, or cut.
The private sector speeks for itself.
The next wave will be increased taxes and fee’s stripping more spending power out of the US consumer.
“But inflation is a good thing, as it is the antidote to deflation (aka Bernanke kryptonite). Its appearance suggests that wages can soon increase, and higher wages are what is needed to get housing price inflation back on track”
Given that inflation is a good thing, and you can never have enough of a good thing; we should look forward to the hyper-inflationary depression currently unfolding in our little quadrant of the space-time continuum.
Just for the record, (if there is such a thing),
I doubt that one person in a thousand has a clue what has already been baked into our gruesome economic cake. (Remember that nationwide, not one person in a thousand reads the HBB either). This is due largely to the calculated and continuous disinformation, propaganda, and misdirection fed by the Government and their puppy dog MSM to already dumbed down and passive consumers.
History is full of similar situations where the population in general suspended recognition of the complex tragedy of oncoming reality, until they were completely engulfed and irreparably harmed.
I’ll just conclude with this mental graphic:
Imagine it is 79 AD in Italy. Eddie lives in Pompeii and is very happy with his accomplishments in life, and also his hillside view of Mt. Vesuvius. Life is good. He dismisses as “gloom and doomers” those who fret about living beneath a volcano.
In 2010 archeologists discover another contorted carbonized corpse beneath 60 feet of ash at the site of ancient Pompeii. Sic transit gloria Eddie.
Events unfurl; whether we are ready, happy, accepting, optimistic, intelligent, educated, prepared, or not.
Eddie would never have realized that the beautiful mountain in view of his Pompeii villa’s gardens was actually an active volcano which would soon bury him.
There is no history of puffs from the top? or earthquaky movements of the land to foretell of the impending?
“History is full of similar situations where the population in general suspended recognition of the complex tragedy of oncoming reality, until they were completely engulfed and irreparably harmed.”
You bring to mind the parable of the frog in the pot of water whose temperature gradually increases to boiling.
Groceries in my areas have jumped an avg of 25%. (100% on many items) Clothing seems to have gone up about 20%. Gasoline is fluctuating up and down. Restaurants have dropped prices somewhat, but the prices had gone up over 50% over the last few years, but only seem to have dropped 15%.
It seems in other regions that some prices ARE dropping. But not here.
The government knows what they do with the CPI.
What region, please?
Houston, Tx
Eco:
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Housing starts rise less than expected.
WASHINGTON ~ Dec 16, 2009
WASHINGTON (Reuters) - New housing starts rose but were lower than expected in November as construction activity for single family dwellings increased only marginally, a government report showed on Wednesday.
The Commerce Department said housing starts increased 8.9 percent to a seasonally adjusted annual rate of 574,000 units. Analysts polled by Reuters had expected housing starts to rise to 580,000 units. However, the percentage increase last month was the largest since May, indicating housing remained on a steady recovery path
October’s housing starts were revised downwards to 527,000 units from the previously reported 529,000 units. Compared to the same period a year-ago, housing starts were down 12.4 percent, but way off the 54.9 percent decline seen in January.
Groundbreaking for single-family homes rose 2.1 percent last month to an annual rate of 482,000 units, after falling sharply in October. Starts for the volatile multifamily segment surged 67.3 percent to a 92,000 annual pace, reversing the previous month’s plunge.
The housing sector, the main catalyst of the most painful U.S. recession since the 1930s, has been slowly improving after three straight years of decline. New home construction contributed to economic growth in the third quarter for the first time since 2005.
New building permits, which give a sense of future home construction, rose 6 percent to 584,000 units last month, the highest since November 2008. That compared to analysts’ forecasts for 570,000 units. Compared to the same period a year-ago, building permits fell 7.3 percent.
There is the word expect being used again in some form or the other.
This is the age of the management of “expectations” about the economy.
This is due to the discovery that the Government cannot “manage” the actual economy due to all the unforeseen consequences and developments.
And the fact that Ivy League eggheads tend to produce long lasting disasters wherever they roam. Although this is often dismissed as “the necessary cost of Government business” by the exiters of reason.
They were off by about 1%. I say they got it right.
Great — they nailed another dark-skinned foreign-born small fry financial operator, while Wall Street’s subprime mortgage lending kingpins keep on collecting their massive bonuses apace in reward for the financial havoc they created.
* DECEMBER 15, 2009
Rajaratnam, Chiesi Charged in Insider Case
Guilty of chiseling while Indian (or Pakastani).
The U.S. sure has been tougher on UBS than on the other banksters.
Response to jane from yesterday (w/regards to time management, e.g. working 60-hour weeks etc) -
I have the same problem to some extent, though not so much at work. I generally always have a backlog of work. All I can say is:
- Make sure you manage priorities and deadlines properly. E.g. sometimes you have to drop current lower-priority work in order to do some higher-priority work that has a deadline.
- Learn to “manage your manager”, which is to say manage their expectations of you. This includes the ability to (diplomatically) say no, if you have too much on your plate already.
- Realize that if you don’t meet their expectations of you, and you get laid off or demoted because if it - that’s OK. It may be an indication you were in above your head, and simply need a simpler/slower/whatever job. If it involves a pay cut, then so be it - manage your finances accordingly. I was laid off last year, went a few months without work, and took a significant pay cut at my new job. It’s a good and stable job though, and still pays enough to pay the bills, so I’m happy. I’m learning new stuff and thus developing a stronger resume in the process - moreso than if I was still in my old job.
- Look for ways to automate your job, so you can get more done in less time. In my case I work with various computer tools and such, and have the ability to write software (scripts and such) to do some automation. Sometimes tools can be found online. Sometimes it’s even worth spending your own out-of-pocket money in order to be more efficient at your job. For more labor-intensive jobs maybe it’s a case of having better physical tools; e.g. if I were a construction worker I’d use a nail gun not a hammer; even if I had to pay for the nail gun myself.
- Realize that people with even the lower-paying jobs in the U.S. are far better off than 95% of the rest of the world. Don’t get caught up in the “keeping up with the Joneses” thing.
- Realize that it’s not the end of the world to work some past age 60/65/etc. (Though I’m hoping to avoid that)
Oh - and steal all the office supplies you can, to sell as a side business.
House Discussing Glass-Steagall Revival, Hoyer Says (Update2)
http://www.bloomberg.com/apps/news?pid=20601087&sid=arMrSVjq4cts&pos=9
Jim Leach, the former Republican chairman of the House Financial Services Committee, defended the repeal in an April 22 speech at a conference on financial reform sponsored by Boston University Law School and the Bretton Woods Committee.
“Changes in Glass-Steagall did not precipitate this crisis,” according to a text of the speech by Leach, an Iowan who now is chairman of the National Endowment for the Humanities.
I knew these slugs were brazen, but wow. Glad I became a political atheist.
This issue is easily resolved. The Fed and their Nobel-prize winning supporters in academia should be asked by Congress to stipulate exactly what kind of questions would threaten the Fed’s vaunted monetary policy independence. Then the auditors should carve out their list of questions to exclude harmful questions about monetary policy that the straw-man propagandists claim would be covered in a Congressional audit.
I am guessing that a very interesting list of questions about recent Fed conduct could be fashioned which steers entirely clear of the “threat to monetary policy independence” strawman. At any rate, monetary policy is totally boring when the Fed is pushing on a string with ZIRP.
* December 8, 2009, 3:01 PM ET
Academics Spar With Populists Over Fed Audits
By Jon Hilsenrath
A group of academic economists — including several Nobel Prize winners, leaders of respected economic journals and former Fed officials — is dialing up its call for lawmakers to drop plans to subject the Federal Reserve to more scrutiny by the Government Accountability Office, an investigative arm of Congress.
In a letter to leaders on the Senate Banking Committee and House Financial Services Committee, the economists say a bill proposed by Rep. Ron Paul (R., Tex.) and Alan Grayson (D., Fla.) to let the GAO review Fed monetary policy would do “serious harm to the economy.” They warn increased congressional oversight would harm the Fed’s independence and ability to fight inflation.
…
Harm Fed’s abillity to fight inflation. I think not, more likely it would harm the FED’s abillity to fight deflation ie pumping large sums of money with no oversight into the hands of the FED owners, ie the banks. All at the expense of J6pk.
People may not like the idea of rasing interest rates if inflation becomes a problem but I would say most understand it. What they don’t understand is the bail out of MegaBank Inc.
You are on the right track. I would think the Congress could get into a discussion of the redistributive aspects of recent discretionary Fed policy decisions without once mentioning the topic of monetary policy.
Of course, the Congress will have to tread cautiously. If they are not careful, Bernanke could quite easily hold up a mirror and shine the spotlight of blame back on the Congress.
Let’s not forget uncle Joe Stalin on the list. Our partner on the one hand a least for a while. Does the left hand know what the right hands doing?
Economic Commentary
Fat Cat Bankers
Keith R. McCullough, 12.14.09, 02:25 PM EST
Year-over-year inflation is about to turn positive. Time to raise rates.
What follows is premarket commentary by Keith McCullough, CEO of Research Edge, LLC.
“I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.”–President Barack Obama
Now isn’t that a heroic one-liner from a President who is in a must-need situation for a political win? If he understands the math associated with who financed these bonuses, I should hope he is including He Who Sees No Bubbles (Bernanke) and Timmy Geithner in this all-encompassing populist attack on bankers.
…
Gulf petro-powers to launch currency in latest threat to dollar hegemony.
The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate. ~By Ambrose Evans-Pritchard
The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China.
Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank.
The Emirates are staying out for now – irked that the bank will be located in Riyadh at the insistence of Saudi King Abdullah rather than in Abu Dhabi. They are expected join later, along with Oman.
The Emirates are staying out for now – irked that the bank will be located in Riyadh at the insistence of Saudi King Abdullah rather than in Abu Dhabi. They are expected join later, along with Oman.
I can’t help but think that “later” will turn out to be in 2025.
Wow I almost split a gut after reading that.
Nothing screams stability like the middle east.
On the Job Hunt: One for the Dogs.
December 16, 2009 by: Orlando Salinas
It’s one career that IS going to the dogs– in a great way! Pet grooming is an industry that continues to see steady growth in America.
According to petgroomer.com, on any given day, there are between two and 3,000 pet grooming jobs here in the United States. Jobs that pay on average a minimum of $200 a day - plus tips!
At the Merryfield School of Pet Grooming in Fort Lauderdale, Fla., Gregg Docktor says his school has seen a steady increase in the number of students who are switching careers and learning the art of grooming family pets.
From high school graduates to bankers and realtors… these future professional groomers learn on dogs of all sizes.
Big and small, from purebreds to mutts and even rescue animals, most dogs are well behaved, although some are biters. Students learn how to deal with them too.
The course runs eight months, around 600 hours, and interestingly enough, there currently is no certification required to become a groomer.
Docktor says he hires America’s top groomers to teach his students; right now, he doesn’t have enough students to fill good paying jobs.
Only in a society as pampered as ours would we waste the resource of humans on something as ridiculous and unproductive as this. I enjoy my chow, but I’m brushing out his hair myself.
Fecaltime!
My parents have a border collie mix. She was a pound puppy, and, apparently, quite badly abused.
She’s the type of dog that has a meltdown over such things as me crossing my legs while eating with the family at the dining room table. Mom thinks that she’d been kicked around quite a bit.
Needless to say, she doesn’t take kindly to being groomed by us or anyone else. The trick is to get as much brushing in during the few nanoseconds that she’ll put up with it.
Hold the presses!
Bernanke now acknowledges that there WAS in fact a bubble. Film at 11. Excerpt from his written response to Senator Bunning:
“To be sure, the experience of the past two years provides a vivid illustration of the economic devastation that can be wrought by
an asset price bubble first building up and then bursting.”
Link: http://bunning.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=3b088771-e7e3-4ade-94a8-bbe9d75cfe15
His rear-view mirror vision is indeed impressive. Now I finally see why he was named Man of the Year.
Not really a rear-view mirror so much. He just happened to glance to the side a bit while primping in the full-length mirror.
I could not help think after hearing a radio show’s news break spot announce him as “Person of the Year” how it sounded just as pejorative as “Person of Interest” -ie- a suspect.
The “Sham-Wow” guy is on the tellie, pimping something called a “Slap Chop”
“You’re gonna love my nuts…..”
But wait there’s more… I’ve seen that ’slap chop’ what a POS. I wish the ’sham-wow’ dude would ’slap chop’ his nuts in one.
Too funny wmbz. Thank you for the laugh.
Does the presentation require a boom-microphone like the sham-wow one?
Another good one……search “Zemogtorrents Breakup” on Youtube.
‘Santa’ stumbles out of vehicle, seeks reindeer. (AP)
SPARTA, Wis. – Santa Claus is in trouble with the law in one western Wisconsin city. Police in Sparta said they cited a man dressed as Santa after witnesses told officers he stumbled out of a vehicle, approached several children playing in a yard, hugged them and demanded to know the whereabouts of his reindeer.
The man was cited for open intoxicants. The driver of the car in which he was riding was arrested for drunken driving.
True Santa Story from Northern Minnesota.
I have a friend that worked for a remote Mining Company. He is a really lovable big character with a real tummy and was asked to play Santa Clause many years ago at a large company Xmas party.
Big JimmyD, aka Santa, was such a hit with the kids and everybody, that he contined to dress up and played Santa at parties and made appearances at schools, community parties, homes and selected bar/restaurants to include the famous old Black Bear Cafe.
Of course, while entertaining eveyone, big JimmyD managed to put away a few beers and shots of blackberry brandy on the sly as we all know Santa didn’t drink in front of the kiddies on cold winter nights.
Now Santa lived near a very small sleepy town out in the middle of nowhere with an area High School, a few stores and barely one flashing stop light. One night, actually an early morning, after making the all of his rounds rounds and a few drinks, tired old Santa was heading home in the snow in full costume when low and behold, a monster buck did he spy prancing upon that HS lawn.
The temptation was too great and old Santa stopped his truck, unloaded his trusty 30-06 and blasted old Rudolf that cold winter
night. Old JimmyD was delighted and smacking his chops, until the lone township county mounty disturbed this near Xmas scene with his law enforcement flashing lights.
Santa was was busted and carted off to the Pokey. The local newspapers and radio all reported it all over the country. Then, the backlash occured from local communities and everyone demanded old Santa released as Christmas and more parties were coming and even the the tiniest northern Minnesota child knew well the difference the real Rudlof and a tasty whitetail deer chop with gravy. Of course being northern Minnesota, Santa was easily forgiven and met with handshakes and grins.
Christmas and Santa were saved and to this day old JimmyD to the best of my knowledge, still makes the yearly rounds to spread Xmas joy and close the Black Bear Cafe minus his trusty old 30-06.
Way to go the best Santa I have ever known and if i get home, a beer and blackbery brandy will still on me old friend. Just drive carefully and ignor those dancing bucks at 2:30 A.m. for as one old local used to sing, “the times, they are are changing.”
Ho ho ho Merry Christmas and to all a good night.
*** Note: Just because I know and love old Santa doesn’t mean I always approve of his shooting and drinking***
…another Ho ho ho !
Israel Billionaire Leviev Mired in New York Property (Update2)
Dec. 16 (Bloomberg) — Israeli billionaire Lev Leviev told a roomful of reporters in August at the beachside Tel Aviv Crowne Plaza hotel he owns that his Africa-Israel Investments Ltd. would seek to restructure about $2 billion of debt.
“Our biggest mistake was our investments in the U.S.,” said the diamond mogul turned real estate investor, who just two years earlier was ranked by the Israeli newspaper TheMarker as the country’s richest man. The revelation, in Leviev’s Russian- accented Hebrew, rocked Israel’s markets, sending its benchmark stock index to its biggest drop since June.
Leviev, 53, born in Soviet Uzbekistan, went from success to success in the decade before the credit crisis. He made his fortune as owner of the world’s largest cutter and polisher of diamonds before turning Africa-Israel into a multibillion-dollar company, with assets from Moscow to New York. He then bought landmark Manhattan properties with borrowed money just as the market reached its peak.
“He became, slowly, slowly, a very great believer in himself — that everything he touched turned into a success and that everything he did had God’s blessing,” said Avi Nota, who in 2007 stepped down as chief executive officer of an Africa- Israel division that develops projects in central and eastern Europe. “When the crisis emerged, he was caught blindsided.”
Leviev, a member of the Chabad-Hasidic movement who travels with a band of bearded bodyguards, is now trying to reach an agreement with Africa-Israel’s creditors to avoid having to seek bankruptcy protection. Africa-Israel bonds make up about 0.6 percent of the total amount of pension savings that Israeli financial institutions manage, the Finance Ministry said in August.
“…….had God’s blessing.”
2005 New Prosperity Church - “God wants you to be rich……”
1942, Stalingrad - “Gott mit uns”
Not that I’m an atheist or anything (believe/don’t believe what you want, it’s not my business), but this belief that God is in the business of picking winners and losers really chaps my a$$.
“but this belief that God is in the business of picking winners and losers really chaps my a$$.”
You’re totally right; picking winners and losers is delegated by God to the Federal Reserve.
I thought the picking of winners and loser was delegated to those that preach “God’s” word.
“…….had God’s blessing.”
It is enough to make you want to chum!
With a “Slap Chop”!
From the Wikipedia article on “predestination”:
“Christians who follow teachers such as St. Augustine and John Calvin generally accept that God does decide the eternal destinations of each person, so that their future actions or beliefs follow according to God’s choice.”
And we think Islam is a strange religion?
Bill, rather you find yourself in the hands of an unrestrained Calvanist than an unrestrained Islamist. Just a thought.
New York’s charging bull turns 20 years old.
http://blog.insidetheapple.net/2009/12/charging-bull-turns-20.html
“The 7,000-pound statue was finished in late 1989. Having scoped out Wall Street to discover when the night guards at the New York Stock Exchange would be scarce, DiModica pulled onto the street in a flatbed truck on the evening of December 15, 1989, lowered the bull into place, and took off, leaving behind a sheaf of flyers telling people about his gift. To DiModica’s surprise, a Christmas tree had been put up in front of the Exchange since he’d done his reconnaissance, and so he was able to tuck the bull underneath the tree as a Christmas present. The flyer announced that the work attested “to the vitality, energy and life of the American people in adversity” and that it was “offered honorably”—and free—”in acknowledgment of American dynamics.” *
At the time, the artist said that he sought to improve the citys’ spirits in the wake of the 1987 stock market crash and junk bond meltdown. If he really wanted to help New York, he would have followed by dumping a giant steel bear on the stock exchange’s doorstep some time in the past 20 years.
* News * India
US House passes gasoline sanctions bill against Iran
Obama, nuclear programme, bill Posted: Wednesday, Dec 16, 2009 at 1406 hrs Washington:
The House measure came even as Obama Administration announced that it is investigating public reports on issues related to nuclear programme.
In an effort to force Iran to freeze its nuclear programme, the US House of Representatives on Wednesday passed a resolution which empowers President Barack Obama to impose new sanctions on foreign companies supplying gasoline to the Islamic Republic.
A similar bill is pending before the Senate, which is likely to follow suit.
The House measure came even as the Obama Administration announced that it is investigating public reports on issues related to Iran’s nuclear programme.
“There has been a public report about an issue related to Iran’s nuclear programme. The United States Government will be investigating those reports,” Assistant Secretary of State for Public Affairs P J Crowley said.
The Iran Refined Petroleum Products Sanctions Act was passed by the House by a vote of 412 to 12.
“The prospect of a nuclear-armed Iran is the most serious and urgent strategic challenge faced by the United States, and we must use all of the diplomatic means at our disposal including tougher sanctions to prevent that from becoming a reality,” said Howard Berman, Chairman of the House Committee on Foreign Affairs.
And the kabuki dance continues………
Yep and we just gave them a big finger waving today over their missile test firing. The front-man kook Amaboutojamawad is looking for attention.
He’s borrowed the “North Korean International Diplomacy Playbook”, aka the “squeaking wheel gets the grease”.
I say let him “go nuke”. We can move him to #1 on the target list, and clean up, by selling military hardware to everybody within range of their missiles.
Give War a Chance.
So - been looking at FDIC data, and charting it. You know what? I think everyone owes Eddie an apology - he’s right - things are looking up.
P.S. I think this can be used as a rough gauge of shadow foreclosure inventory, at least in terms of assets held by the banks. Given an average mortgage of about $250k during the bubble (rough estimate, based on census data), we’re looking at roughly 1M homes held in foreclosure by the banks, plus about 400k at 90+ days delinquent, and about 500k at 30-89 days delinquent.
I’m not sure if this includes losses in assets sold to the Fannie/Freddie and/or the Fed. I’m not an accountant, so not sure how that works. There’s about $605 B in “pass-through” securities there, and $198B in CMO’s (Collateralized Mortgage Obligations).
Seems to jive about with what’s been estimated here a few times - about 2M or so foreclosure and delinquent shadow inventory.
What is “Non-accrual” and why is it shooting up towards the moon? Can Eddie shed any light here?
Oftentimes, the best answer comes straight from the horse’s mouth (Caution: Link to .pdf file).
Nonaccrual — For purposes of this schedule, an asset is to be reported as being in nonaccrual status if:
(1) it is maintained on a cash basis because of deterioration in the financial condition of the borrower,
(2) payment in full of principal or interest is not expected, or
(3) principal or interest has been in default for a period of 90 days or more unless the asset is both well secured and in the process of
collection.
If this is correct, great. It’s what many people nationwide need to have happen.
But not everyone here owes eddie an apology. Some of us don’t necessarily think that he’s wrong on all counts.
Some haven’t been endlessly attacking him either.
‘…But not everyone here owes eddie an apology. Some of us don’t necessarily think that he’s wrong on all counts. ‘
All’s I got say: “Once a Haskell, always a Haskell” …until he marries my lil’ sister, …then I… “carefully” might, maybe, perhaps…”reconsider”.
(Hwy’s children will never marry…at least not if they feel they to ask “dad” first”)
“But not everyone here owes eddie an apology.”
F-Eddie and FU2.
If you “seasonally adjust” numbers that are totally out of season, do you get an unseasonably bad result?
John Williams thinks the recent economic numbers out of Wahington are fantasy.
Or just plain wrong. Depends on whether or not you think we’re being lied to on purpose, or just by accident.
Economic Headlines December 16, 2009
by John Williams - “Shadow Stats” #266
__________
Bad Seasonals Turn Data Topsy-Turvy
Annual CPI-U Inflation Jumps to 1.8% (actual 8.8%)
November versus October Annual Inflation
Swings Positive by 2.0% for the CPI, 4.3% for the PPI
November Annual Real Retail Sales Were Unchanged
November Housing “Gain”
Statistically Not Different from Zero
Recovery Hopes Based on Seriously Twisted Data.
Reporting of some widely followed series, particularly out of the Departments of Commerce and Labor, appear to be generating false positive signals for a number of headline month-to-month numbers, including retail sales and the payroll and unemployment series. The problem could extend to the purchasing managers survey, where the seasonal factors are calculated annually by the Commerce Department.
The problem is recognized within the agencies, but it has not been put before the public. The Fed has talked of the problem with some of its statistical releases, and it appears to have addressed those issues, at least partially. As noted in the discussion in prior Commentary No. 265, no government statistical agency has had to handle such an extreme economic circumstance in the history of modern economic (meaning post-World War II) reporting. Accordingly, the issues are not simple to address, but they are helping to create an unrealistic optimism in some areas as to a faux economic recovery. Generally, the economy continues to sink or bottom-bounce; no recovery is in place.
Following up on data distortions created by the severity of the economic downturn, for example, John Crudele of the New York Post made the point to me that the seasonally-adjusted 1.3% monthly gain reported for November retail sales was based on virtually zero monthly growth in the unadjusted series. In normal times, and with normal seasonal patterns, one would expect sales to increase in November versus October, when the retail industry’s dominant period — the holiday shopping season — begins.
Alternative Consumer Inflation Measures
Adjusted to pre-Clinton (1990) methodology, annual CPI growth rose to 5.1% in November, versus 3.2% in October, while the SGS-Alternate Consumer Inflation Measure, which reverses gimmicked changes to official CPI reporting methodologies back to 1980, rose to about 8.8% (8.77% for those using the extra digit) in November, versus 7.1% in October.
The SGS-Alternate Consumer Inflation Measure adjusts on an additive basis for the cumulative impact on the annual inflation rate of various methodological changes made by the BLS. Over the decades, the BLS has altered the meaning of the CPI from being a measure of the cost of living needed to maintain a constant standard of living, to something that no longer reflects the constant-standard-of-living concept. Roughly five percentage points of the additive SGS adjustment reflect the BLS’s formal estimate of the impact of methodological changes; roughly two percentage points reflect changes by the BLS, where SGS has estimated the impact, not otherwise published by the BLS.
GM Tonawanda pulls plug on V-8
Business First of Buffalo
The end of the line — and end of an era — has arrived for what has been a staple product for more than 50 years at the General Motors Tonawanda engine plant.
On Friday, Dec. 18 the last variation of the “big block” class of V-8 engines that were made since 1959, is scheduled to roll off the line.
A late morning ceremony is planned to primarily honor those of the plant’s more than 800 employees who worked on the latest version, which has been produced since 1999.
The big engine was developed in the U.S. during the 1950s and 1960s and was used to power millions of Chevrolet vehicles over the years.
“As American automobiles grew in size and weight the engines powering them had to keep pace,” said Nina Price, a spokeswoman for the local plant.
The first big block V-8 engine, the W-Series, was first produced in 1958 with the next version, the Mark IV series, being introduced in 1965.
“Following this was the Mark V series big block V-8, which started production in 1989, and finally the L18 V-8 (Vortec 8100) engine started production in 1999,” Price said.
The plant’s current V-8 production equipment was installed for the Mark V series, Price said.
The V-8 was the plant’s longest-running engine line, but new trends in the auto industry made GM’s trademark automotive engine obsolete.
Currently the plant’s main engine line is the L850. It also makes inline 4- and 5-cylinder engines.
BBC, RIP
Baseball, hot dogs, apple pie and ……..427s?
Yup. I put many hours on a Tonawanda 427. Good times.
ewww spewing all that green house gasses, Al Gore would not be happy with your lifestyle.
She’s real fine my 409
She’s real fine my 409
My 409
Well I saved my pennies and I saved my dimes
(Giddy up giddy up 409)
For I knew there would be a time
(Giddy up giddy up 409)
When I would buy a brand new 409
(409, 409)
Giddy up giddy up giddy up 409
(Giddy up giddy up 409)
Giddy up 409
(Giddy up giddy up 409)
Giddy up 409
(Giddy up giddy up 409)
Giddy up 40…
Nothing can catch her
Nothing can touch my 409, 409
(After posting the above I now am not sure that the 409 was a GM product. If it wasn’t, my bad!)
The 409 was a Chevrolet, one of the “W” series, with the 348 engine that came out in 1958.
The Mark IV debuted at Daytona in 1963 as the “Mystery Engine”, first produced as a 396ci engine in 1965 in full size Chevrolets and Corvettes; upsized to 427ci in 1966, upsized again to 454ci in.
Known affectionately as the “Rat Motor”
And no, Al Gore has probably never been near one. I’m betting his first car was something like a 6 cylinder Ford Falcon.
“My mother used “409″ to clean toilets, maybe she was ahead of her times…”
My 454 is still running.
Hwy:
If that was today i could smell a copyright infringement lawsuit….How dare you name a toilet cleaner after a great Detroit engine???
409 = “It did the job” is that better?
hwy lol
Mortgage Originations to Fall 16% in 2010 as Stimulus Ends.
(Bloomberg) — Mortgage originations probably will decline 16 percent next year as the homebuyer tax credit expires and the Federal Reserve winds down purchases of mortgage-backed bonds, according to a report by Keefe, Bruyette & Woods Inc.
Lending may drop to $1.6 trillion in 2010 from $1.9 trillion this year, Bose George and Jade Rahmani wrote in a research note today. The volume of refinancings will decline after the end of the Fed program in March boosts rates, and home purchases will “taper off” after the tax credit expires in April, according to the analysts for the New York-based firm.
“We do not expect the government to attempt to boost refinance activity further, primarily because there are limited options available to do so,” the analysts wrote.
The housing market was helped this year by an $8,000 first- time buyers tax credit that pushed resales to a 6.1 million annual pace in October, the highest since February 2007, the National Association of Realtors said in a Nov. 23 report. Home sales are likely to be “flat” in 2010, Keefe said.
President Barack Obama last month signed a bill extending the program into 2010. The new version keeps the first-time buyer benefit and makes a smaller credit available to some move- up buyers.
The Fed in January began purchasing $1.25 trillion of bonds backed by home loans in an effort to reduce fixed mortgage rates. The rate dropped to an all-time low of 4.71 percent during the week ended Dec. 4, according to McLean, Virginia- based Freddie Mac. It increased to 4.81 percent last week.
California Taxes Fall Short of November Target by $439 Million
Dec. 16 (Bloomberg) — California’s finances resumed a decline in November, adding to the state’s resurgent deficit as Governor Arnold Schwarzenegger readies a spending plan that will need to erase a $21 billion gap.
California, the most populous U.S. state and the largest municipal bond issuer, collected $439 million less revenue in November than what was estimated in July, Schwarzenegger’s Department of finance said yesterday in a report. The decline leaves revenue $1 billion behind projections halfway through the fiscal year.
Schwarzenegger is due to release his budget for the coming fiscal year in January. California Legislative Analyst Mac Taylor said in November the state will face a deficit of $14.4 billion beginning in July. That’s in addition to a $6.3 billion gap opening up in the current year as several projections within the budget falter or miss revenue projections.
“In many respects, the steps to close next year’s budget gap will be even more difficult and more challenging than what we’ve just had to do this year,” Department of Finance spokesman H.D. Palmer said yesterday.
California has been among the most affected by the recession as a wave of home foreclosures, rising unemployment and the 2008 stock market tumble dissipated expected tax receipts. From February through July, lawmakers worked to close a record $60 billion deficit with spending cuts, temporary tax increases and other one-time fixes. The unemployment rate rose to 12.5 percent in October from 8 percent the year before and 4.8 percent in July 2006.
We are sure lucky the recession is over! California narrowly dodged a bullet this time around…
OTOH, South Carolina just announced an additional across-the-board cut of 5% in the state budget due to declining tax revenues. The cut includes the state’s payment to local school systems (schools are funded at the state level here, not the county level). No fuss, no doomsday predictions. The prevailing attitude seems to be, “Hey, we’re taking less in so we gotta spend less.” “OK.”
“No fuss, no doomsday predictions.”
I’m going out on a limb here and guessing that South Carolina is less than $21 bn in the hole?
“…I’m going out on a limb here and guessing that South Carolina is less than $21 bn in the hole?”
Geez Mr.Bear, you think Gov. Stanfield is losing sleep over this?
Hey Hwy call my Argentine hussy she needs to comfort me over this agonizing decision.
aNYCdj,
Sorry, I’ve had too much red red wine to reconcile: SOUTH CAROLINA with: hole…governor…Argentina…Fort Sumner.
We have no choice but to send illegals home, stop educating them, no public benefits….or demand mehiko pay for their up keep…
How You south of OUR legal border you give us as in FREE…a hundred million barrels of oil each year and we will look the other way…
And thus that 2% pay raise for federal workers is a drop in US wage pool that is circling the drain.
U.S. National Debt Tops Debt Limit (AP)
The latest calculation of the National Debt as posted by the Treasury Department has - at least numerically - exceeded the statutory Debt Limit approved by Congress last February as part of the Recovery Act stimulus bill.
The ceiling was set at $12.104 trillion dollars. The latest posting by Treasury shows the National Debt at nearly $12.135 trillion.
A senior Treasury official told CBS News that the department has some “extraordinary accounting tools” it can use to give the government breathing room in the range of $150-billion when the Debt exceeds the Debt Ceiling.
Were it not for those “tools,” the U.S. Government would not have the statutory authority to borrow any more money. It might block issuance of Social Security checks and require a shutdown of some parts of the federal government.
Good thing we got a bunch of tools running the accounting
That’s one way to scare up mo’ money, just say the chidrens won’t get to school…
MTA Board Approves ‘Doomsday’ Cuts
Buses, Subways, Student MetroCards Affected
MYFOXNY.COM - The MTA board has approved its 2010 doomsday budget. It includes service cuts and could leave New York City children without free rides to their public schools if it is implemented.
The Metropolitan Transportation Authority, the nation’s largest transportation agency, is facing a $383 million budget shortfall.
The MTA will hold public hearings and vote again. That leaves an opening for an 11th-hour rescue by the city or the state. The policy of free or discounted student rides has been in place since 1948. Ending it could cost half a million students nearly $1,000 per year in transportation fees.
New York City Council Member Bill de Blasio from Brooklyn’s 39th District said, “The MTA’s vote today could very well result in students missing school because their families can’t afford the extra cost of a metro card. We cannot place such an unfair burden on low income students and their families in the middle of a recession.”
My mother’s from New York. Buffalo, to be precise.
Although that city had bus service, Mom and her friends walked to and from school. No matter what the weather. To this day, Mom is quite proud of that.
Slim, My Father hales from Fitchberg, Massachusetts I remember being told that he always walked to school. No stories of up hill both ways for six miles each way bare foot, but he did mention his only tardy in grammar school was when the drifts were so high in ‘37? that he ran late because he had to jump from the top window and shovel to the back door so his step-mother could get out to the milk shed.
The kids can walk to school…we all did even in bad weather,
This will hurt more…they will cut the outlying areas which means people will have a very hard time getting to and from work if its not 7am -7pm…M-F
Some buses like the one at the rend of my street is a commuter bus toward Manhattan in the morning running every 10 minutes and 1/2 hr during the day and every hour on weekends. but at night 8-11pm its jammed with people getting off work at the factories on its route
Cant figure out how they would manage…its the only bus that goes next to ups fedex and recycling places call centers etc.
————–
It includes service cuts
Muggy’s chunk-spewing littleman: 1
Landlord’s Berber carpet: 0
You just can’t beat renting sometimes.
Muggy’s deposit: gone
cold water + white vinegar: stain gone
My bet is on the littleman. Go littleman.
Berber hides many, many sins.
I haven’t yet had the privilege of cleaning toddler ralph off Berber, but cat vomit and dog turds come up pretty well …
This stuff works quite well:
http://www.naturemakesitwork.com/home/index.php
gawd that sound ewy.
Dear Eddiot….
How come you never responded to this?
——————————————————
Comment by exeter
2009-12-02 13:28:47
More reality for tard boy.
http://tinyurl.com/ykq8xra
A gargantuan, pretentious,ostentatious monstrosity fit for a howmuchamonther in Atlanta.(eddie?)
6000sq ft, 3 car garage. Last sold on 3/3/2009 for $680k.
Todays price? $305k.
Price per sqft? $50.83
And guess what? It’s still over priced at $50.83sq/ft.
I’d like to add on this, too:
http://tampa.craigslist.org/psc/cto/1495918501.html
That’s at least worth $50k! Everybody is buying!
Wow, exeter! I like how it’s conveniently located close to nothing.
He’s a “Haskell” …unless you evidence otherwise.
good news!! If you follow the link to the listing you will see that “Susan” researched this !! (Listing uhs is Susan Powell)
My wife and I checked out a few homes today in Palm Harbor. We were underwhelmed. We’ll be visiting “home” for the holidays, so we’ll be taking stock of our lives while we’re there.
Lots of people are doing that today…and the sad part is: this is the future for a lot of people. At least you are working and things are going pretty good. But your expectations are showing.
http://tinyurl.com/ybw3eps
“Former Missouri House Speaker(R) and noted sex fiend Beats Up, Chokes Mistress During Sex”
So much for conservative family values.
“…In the affidavit filed Monday, prosecutors said Jetton and the woman agreed on using “green balloons” as a “safe word” — sometimes used in cases of rough sex to keep things from getting out of control.”
I guess “Red” state ….”Blue” state… would have been phonically challenging?
Or the word, Stop?
Stop. Don’t.
Stop, don’t.
Stop, don’t, stop.
Don’t stop, don’t stop, don’t stop…
‘“(The victim) states the next thing she remembered, she was on the floor in the living room and Mr. Jetton was trying to restrain both of her hands with what appeared to be a leather belt,” the report says.’
Sounds to me like a typical red-blooded Republican, don’t chy’all think?
Not really.
Sounds like a typical red-blooded man, that’s what I think.
The central banks will buy 13.8 million ounces (429 metric tons) this year, worth $15.5 billion, for the first net expansion in reserves since 1988, New York-based researcher CPM Group estimates. Gold fell 15 percent that year and took another 15 years to trade again at the same price as central banks from Switzerland to the U.K. cut their holdings.
India, China and Russia are now adding to reserves as gold nears its longest winning streak since at least 1948. They’re joining a rush as investors in exchange-traded funds amass holdings to rival the biggest central banks. Clive Capital LLC, manager of the biggest commodities hedge fund, had its best return since May last month, led by gains in precious metals.
Now
On September 18, 2009, the IMF’s Executive Board approved gold sales strictly limited to 403.3 metric tons, representing one eighth of the Fund’s total holdings.
I just wonder if this is some back door way to pump money to the IMF??
From the IMF web site
The IMF monitors the world’s economies, lends to members in economic difficulty.
So is this a way to covertly fund the IMF. Citizens might cry bloody murder if they saw that there gov was giving the IMF money when so many at home are in pain.
LAS VEGAS (AP) — Casino executives prepared to open the newest and most expensive joint on the Las Vegas Strip on Wednesday night — a 4,000 room resort at the heart of the $8.5 billion CityCenter complex.
The 61-story Aria Resort & Casino was to be publicly unveiled with fireworks and fanfare, fitting for the heart of a project that has taken center stage in the struggling casino industry.
**
Several hours earlier, CityCenter owners MGM Mirage and Dubai World thanked architects, employees and each other at a morning ceremony.
***
A Nevada gambling regulator last month likened CityCenter’s development to a 12-round boxing match, with the opening signifying its midpoint.
“I think clearly that that was the seventh-round bell. Our foe is weakening,” Murren told The Associated Press after hammering the bell 56 times. “Our foe — the economy, the recession, the financial crisis — our opponent is now the one that’s close to its knees, and we’re just gaining momentum and gaining strength.”
As CityCenter begins operating, it’s now up to its 12,000 employees to deliver an entertaining, exciting environment that makes guest want to keep coming back, Murren said.
“”This isn’t just another opening,” Murren said. “This is a game-changer.”
Once Aria opens, its rooms, along with those at CityCenter’s Mandarin Oriental and Vdara hotels, will increase room capacity on the Las Vegas Strip by 8.5 percent, UBS Investment Research analyst Robin Farley said.
Murren told the AP that investors have wondered whether CityCenter would finish, and now they want to know whether it can be successful in this economy without cannibalizing its other resorts.
MGM Mirage owns the most casinos on the Strip, but Murren believes CityCenter will help, not hurt, the company’s other resorts.
The room increase has competitors worried, as visitation to Las Vegas has decreased in the past two years as consumers spent less time and money traveling and gambling.
On Tuesday, a representative of the venerable Sahara hotel-casino less than three miles from CityCenter said it would shutter two of its towers until demand improves. A day earlier, Binion’s Gambling Hall & Hotel in downtown Las Vegas closed its 365 guest rooms and cut 100 jobs to cut costs.
Competitors worry that CityCenter brings immediate pressure to lower room rates to keep hotels filled. But Murren and other MGM Mirage officials predict CityCenter will help Las Vegas as a whole, spurring visitation and bringing a catalyst for long-term prosperity.
OK this is a bet I’m willing to take. I’m going to bet against the house on this one.
Chicago – Wednesday’s announcement by the Federal Trade Commission (FTC) that it is suing microchip manufacturer Intel for antitrust behavior is seen in law circles as a seismic shift in how the Obama administration plans to deal with companies that threaten to dominate their particular sector.
The suit is monumental for illustrating significant differences in corporate philosophy between an FTC with Obama in the White House and what cases the regulatory commission pursued the previous eight years under President Bush, says Bill Wycoff, an antitrust attorney in Pittsburgh with Thorp Reed & Armstrong.
“To a large extent the Bush administration told [the FTC] not to come in and try to break up companies that wanted to merge or gain monopolies. There was a feeling that big business is better, and they believed there were benefits to be gained when competing worldwide in becoming bigger and more powerful,” says Mr. Wycoff. “Obama is going back to more classic antitrust theory that says the best thing for the economy is competition.”
In its complaint the FTC charges that Intel “holds monopoly power in the market” of central processing units, or CPUs, dominating up to an 85 percent share of the market since 1999. To maintain its majority foothold, the FTC says Intel deliberately redesigned the architecture of its software to sabotage the chips from rival companies and offered unfair discounts to dissuade computer manufacturers from purchasing chips from any competitor.
The FTC has gone after Intel beforeThis is not the first time Intel and the FTC have met in court. In 2000 Intel faced a similar suit from the FTC that charged the company illegally refused to work with computer makers in an effort to coerce them into surrendering certain intellectual property rights. That case was eventually settled before going to trial.
NOw if they would only apply this to Wall Street.
40-year loan, we barely knew thee…
* The Wall Street Journal
* REAL ESTATE
* DECEMBER 9, 2009
More Borrowers Drawn to 15-Year Mortgage
By RUTH SIMON
Lured by rock-bottom interest rates, a growing share of borrowers looking to refinance are opting for a 15-year mortgage instead of the traditional 30-year one.
Fifteen-year fixed-rate loans accounted for nearly one in five refinance applications in October, according to the Mortgage Bankers Association. That’s up from 9.1% a year earlier and 7.5% in October 2007. The October data are the most recent available.
The move to shorter-term loans comes as rates on these mortgages have dropped to near historical lows. Rates on 15-year fixed-rate conforming mortgages averaged 4.46% last week, according to HSH Associates in Pompton Plains, N.J., well below their recent high of 5.25% in mid-June. Rates on 30-year fixed-rate conforming loans averaged 4.99%, or about half a percentage point higher.
To be sure, 15-year loans have their disadvantages. Even with the low rates, monthly payments can be substantially higher because the loan must be paid off over a shorter term. Borrowers are locked into the higher payments for the life of the mortgage.
The higher payments make 15-year loans less popular with home buyers, accounting for less than 5% of purchase applications. “It’s entirely a refinance phenomenon,” says Jay Brinkmann, chief economist of the Mortgage Bankers Association.
Originations of 15-year mortgages at Wells Fargo & Co. are up 55% through November from a year earlier. At J.P. Morgan Chase & Co., 15-year loans now account for 20% of refinances, up from 10% a year ago.
Many borrowers attracted to 15-year loans took out their previous mortgage six or seven years ago and would prefer to shorten the term of their mortgage rather than extend it, says Michael Menatian, a mortgage banker in West Hartford, Conn. Because they have already paid down some principal, the increase in payment isn’t as great as it would be if they were earlier in their mortgage, he adds.
…
To pay, or not to pay: that is the question:
Whether ’tis nobler for the budget to suffer
The slings and arrows of outrageous resets,
Or to take ARMs against a sea of creditors,
And by walking stiff them?
Mr Figg apparently made up his mind to be like a tree and leave.
* The Wall Street Journal
* REAL ESTATE
* DECEMBER 17, 2009
Debtor’s Dilemma: Pay the Mortgage or Walk Away
In Down Real-Estate Market, Homeowners Are Deciding to Abandon Their Loan Obligations Even if They Can Afford the Payments
By JAMES R. HAGERTY and NICK TIMIRAOS
PHOENIX — Should I stay or should I go? That is the question more Americans are asking as the housing market continues to drag.
In good times, it would have been unthinkable to stop paying the mortgage. But for Derek Figg, a 30-year-old software engineer, it now seems like the best option.
Mr. Figg felt trapped in a home he bought two years ago in the Phoenix suburb of Tempe for $340,000. He still owes about $318,000 but figures the home’s value has dropped to $230,000 or less. After agonizing over the pros and cons, he decided recently to stop making loan payments, even though he can afford them.
Mr. Figg plans to rent an apartment nearby, saving about $700 a month.
A growing number of people in Arizona, California, Florida and Nevada, where home prices have plunged, are considering what is known as a “strategic default,” walking away from their mortgages not out of necessity but because they believe it is in their best financial interests.
A standard mortgage-loan document reads, “I promise to pay” the amount borrowed plus interest, and some people say that promise should remain good even if it is no longer convenient.
George Brenkert, a professor of business ethics at Georgetown University, says borrowers who can pay — and weren’t deceived by the lender about the nature of the loan — have a moral responsibility to keep paying. It would be disastrous for the economy if Americans concluded they were free to walk away from such commitments, he says.
…
Professor Bear suggests Professor Brenkert should focus his sermons on New Age business ethics towards the subprime mortgage lending kingpins who funded this mortgage lending catastrophe. Leave the little guy, who would need to be highly irrational to keep paying on that fraudulently overpriced mortgage Wall Street sold him, out of the discussion.
Beware of Greeks bearing grifts.
* The Wall Street Journal
* DECEMBER 17, 2009
Debt Downgrade Deals Greece a New Blow
BY BRIAN BLACKSTONE AND JOHN KELL
Greece suffered its second debt-rating downgrade in a week, undermining the country’s efforts to reassure markets that it can repair its battered finances.
Standard & Poor’s Corp. cut its rating one notch to triple-B-plus and warned of future downgrades. The euro slipped slightly against the U.S. dollar on the downgrade, adding to recent declines that have pushed the common currency to its lowest level against the greenback since early October.
…